Asia
Modest gains on Wall Street on Wednesday failed to translate into a stronger close in Asia Pacific markets. The exception was Hong Kong’s Hang Seng, which received a boost from tech index Nasdaq.
The global geopolitical picture remains highly uncertain, however, especially between the United State and North Korea. After an apparent breakthrough in diplomacy between the two sides – and the historic rapprochement between North and South Korea – relations between the Trump administration and Kim Jong-un have soured dramatically in recent days. The June summit between the two nations is no longer seen as a done deal.
China’s CSI 300 and Japan’s Nikkei were the biggest fallers today, losing around 1%.
The Japanese yen has risen against the dollar in recent days after a month of weakness. This week the dollar has dropped below 110 yen. The Nikkei 225 has bounced back from multi month-lows since March but progress has been slow going this week. The price-weighted index closed at 22,437 points today, a way of the recent 27-year high above 24,000. In theory the recent dollar strength should support Japanese equities in the short term, but the yen’s safe haven appeal in times of heightened political anxiety could stall progress.
Carmakers in South Korea and Japan were under pressure on fears over tariffs imposed by the US administration.
Europe
After a break towards 7,900 points earlier the week, the FTSE 100 has eased off record highs, especially after a break higher for the pound against the dollar today. Much better than expected retail figures – a rise of 1.5% in April (excluding fuel) against a forecast of 0.1% - helped support the pound. Sterling is likely to remain in the spotlight amid a speech by Bank of England Governor Mark Carney.
Spain’s Ibex was one of the best performing indices in the eurozone amid general gains across the board.
In Germany, news of massive job cuts at flagship bank Deutsche Bank (DBK), a mainstay of the Xetra Dax, put very minor downward pressure on the company’s shares.
In Turkey, an emergency interest rate hike from the country’s central bank has helped stop the freefall in the lira for the time being.
North America
US stock futures are being held back on Thursday by US-North Korean tensions, despite a potentially positive boost from last night’s Federal Reserve minutes
In economics home sales and job figures are in view. Tomorrow brings durable goods orders into focus.
Among companies reporting are retailers Best Buy (BBY) and Gap (GPS).
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