European stocks steady after Asian fall

LONDON: Europe’s stock markets steadied today after Asian counterparts began the week strongly lower, with investors remaining in a gloomy mood after several days of market turbulence sparked by trade rows and a spat over the US central bank.

European shares struggled for direction as traders wrestled with a cornucopia of risks, including higher oil prices from Saudi Arabia tensions – and ongoing turmoil surrounding Brexit that briefly weighed on sterling.

“The pound is holding up surprisingly well this morning, recovering a little after gapping lower over the weekend as hopes of a Brexit deal in principle this week have diminished significantly,” said David Cheetham, chief market analyst at XTB traders.

“The FTSE 100 is little changed near the 7,000 (points) level as stocks around the globe look to consolidate and lick their wounds after last week’s large scale selling.”

Trading in Frankfurt was meanwhile delayed by more than an hour today owing to a technical hitch.

Gold reached a three-month high at US$1,230 (RM5,113) an ounce, with the precious metal profiting from its haven investment status.

Saudi stocks made a partial comeback after days of heavy losses in economic fallout linked to political tensions over the disappearance of prominent journalist Jamal Khashoggi.

In Asia, Japanese equities led the way lower, with the benchmark Nikkei 225 shedding almost 2%, in anticipation of an announcement from Prime Minister Shinzo Abe of a two percentage-point hike in the sales tax.

Japanese stocks faced pressure also after US Treasury Secretary Steven Mnuchin said over the weekend that Washington wants to include a provision to prevent currency manipulation in future trade deals with Tokyo.

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Chinese stocks, which were the worst hit in last week’s global rout, also tracked lower, with the benchmark Shanghai composite off 1.5%.

“We can’t say the shock is over,” said Masayuki Kubota, chief strategist at Rakuten Securities.

Last week saw a broad-based sell-off in global equities, prompted by fears of higher US interest rates, continued worries over US-China trade and attacks by President Donald Trump on the Federal Reserve, which he called “crazy”.

On Friday, the bulls attempted a fight-back but found it hard going in another seesaw session. Early European gains fizzled and the Dow Jones closed up 1.2% following late buying but it also dipped into the red for part of the session.

This week, traders are expected to focus also on a raft of economic data and dozens of company results. – AFP