Global Market Report - September 10

Statements by the US President on tariffs and Apple weighed on Asia Pacific stocks on Monday, particularly the technology sector

Morningstar 19/09/2561

Global Market Report

Asia

China’s stock market resumed its slide at the start of the new trading week. The Shanghai Composite Index dropped again through 2,700 points, a technical level it has struggle to hold above in recent weeks. Once again, Trump’s trade policy is the wall of worry that Asian markets are unable to climb. On top of the $200 billion in new tariffs planned by the US administration, the President is planning a further $267 billion of tariffs. These additional tariffs are “ready to go at short notice”, Trump said. Comments by the President urging Apple to move its production back to the US weighed on Asia tech stocks.

Hong Kong’s Hang Seng was off even more than the Shanghai Composite in percentage terms. A 360 point fall takes the index down to 26,613 points. Another few trading sessions like today’s and the Hang Seng could revisit the 25,000 levels last seen in summer 2017. Tencent (00700)’s share price continued to come under pressure, and today it lost around 1%.

Japan’s Nikkei 225 managed a minor gain amid wider falls in Asia-Pacific equities, helped by a relatively stable yen/dollar exchange rate.

Europe

Stock markets in Europe managed to shrug off the negative mood from Asia by posting some modest gains, led by Spain.

The UK’s FTSE 100 reversed early losses but was still trading below 7,300 points in mid-morning trading. Primark owner Associated British Food (ABF) was one of the biggest fallers initially despite reaffirming its full year outlook and reporting stronger sales from its budget clothing chain.

It’s a big week for UK economics: today revealed that, under the relatively new monthly GDP measure introduced by the ONS, the UK economy grew 0.3% month on month in July. The rise points to a better third quarter GDP number, which is due at the end of October.

Tomorrow sees the release of unemployment numbers. The UK jobless rate could drop through 4% for the first time since 1974.

The Bank of England meets this week but is not expected to raise interest rates after last month’s quarter-point rise.

North America

US inflation for August is one of the highlights of the economic calendar this week. The Consumer Price Index is expected to have risen by 2.8% in August, against a yearly rise of 2.9% in July. Canada’s CPI number for August is due to next week.

Retail sales for August will also be in view on Friday.

US stock markets are expected to start the week on a positive note after last week’s falls.

 

 

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