Donald Trump walked out of a meeting with congressional leaders aimed at ending the government shutdown after Democrats refused to fund his border wall (ALEX WONG)
London (AFP) – European and Asian stocks mostly slid Thursday on profit-taking, despite overnight gains on Wall Street, as investor optimism over China-US trade talks evaporated, dealers said.
Markets also took a knock after President Donald Trump walked out of a meeting with Democrats to resolve the ongoing US government shutdown, which is now in its third week with no end in sight.
Markets had posted solid gains after the US Federal Reserve took a distinctly softer tone on interest rate hikes.
“Stocks have slipped today as some of the positive sentiment surrounding US-China trade talks has evaporated,” said CMC Markets UK analyst David Madden.
“We were updated yesterday that the discussions ended on a positive note but there is still some way to go.”
After three days of talks in Beijing, Chinese officials said negotiators had “laid the groundwork” to resolve their differences.
Trump earlier this week tweeted his optimism a deal could be struck at some point but the lack of concrete news has persuaded some investors to cash in recent gains.
“China has agreed to purchase more US goods and progress has been made in relation to intellectual property rights, but the full picture has yet to be revealed.
“The lack of new news has prompted dealers to take some profit off the table,” Madden added.
– Fed patience –
In Asia, Tokyo led the losses, with exporters hit by a rising yen against the dollar after minutes from the Fed’s latest policy meeting showed it was happy to ease the pace of rate hikes to prevent a slowdown in the economy.
The US central bankers said they “can afford to be patient” owing to low inflation and uncertainty about the outlook and while there would likely be more increases in borrowing costs, it would be a “relatively limited amount”.
The minutes reinforced comments from Fed boss Jerome Powell last week that there was no “pre-set” plan on rates, which fanned a global market rally.
Fears about rising costs were a key factor in driving equities lower last year.
They also fuelled a dollar sell-off with the greenback weakening across the board and the Chinese yuan at its highest level since late August.
Oil prices declined Thursday, having surged around five percent Wednesday in response to confirmation from Saudi Arabia that it would slash exports after an agreement between OPEC and other top producers such as Russia last year.
– Key figures around 1130 GMT –
London – FTSE 100: DOWN 0.2 percent at 6,894.16 points
Frankfurt – DAX 30: DOWN 0.3 percent at 10,857.44
Paris – CAC 40: DOWN 0.7 percent at 4,779.56
EURO STOXX 50: DOWN 0.4 percent at 3,059.03
Tokyo – Nikkei 225: DOWN 1.3 percent at 20,163.80 (close)
Hong Kong – Hang Seng: UP 0.2 percent at 26,521.43 (close)
Shanghai – Composite: DOWN 0.4 percent at 2,535.10 (close)
New York – Dow: UP 0.4 percent at 23,879.12 (close Wednesday)
Dollar/yen: DOWN at 108.09 yen from 108.17 at 2200 GMT
Euro/dollar: DOWN at $1.1524 from $1.1543
Pound/dollar: DOWN at $1.2763 from $1.2789
Oil – Brent Crude: DOWN 47 cents at $60.97 per barrel
Oil – West Texas Intermediate: DOWN 37 cents at $51.99
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