US President Donald Trump and North Korea’s leader Kim Jong Un left the summit venue in Hanoi without a public signing ceremony (Saul LOEB)

London (AFP) – World stock markets came under pressure Thursday as a summit between Donald Trump and Kim Jong Un ended abruptly without an agreement.

Asian equities had been fluctuating throughout the day on tempered optimism over China-US trade talks, weak factory data from Beijing and fresh geopolitical tensions in Kashmir.

But they took a decisive turn south after an expected lunch and signing ceremony between the US and North Korean leaders was called off at the last minute.

Wall Street was modestly lower by the late New York morning, as unexpectedly strong fourth-quarter US growth figures helped offset negative sentiment over geopolitics and some soft earnings reports.

In Europe, Frankfurt and Paris managed a small recovery by the close, while London remained in the red.

– Risk sentiment takes ‘hit’ –

“Global equities in general have pulled back as risk sentiment took a hit after the US and North Korea failed to reach an agreement over denuclearisation for the (Korean) peninsula,” said XTB analyst David Cheetham.

“US president Donald Trump and North Korean leader Kim Jong Un abruptly cut short their summit in Hanoi, and in doing so cancelled a signing ceremony as the two leaders failed to make any tangible progress and agree terms on the deal.”

The shock news came just hours after Kim raised the prospect of a permanent US diplomatic presence in Pyongyang and Trump said he was in “no rush” for a speedy deal over North Korea’s nuclear programme.

Trump later told reporters that he was not willing to give in to Kim’s demands to lift US sanctions on North Korea.

In reaction, Seoul dived 1.8 percent and Tokyo ended 0.8 percent lower, while Shanghai and Hong Kong each shed 0.4 percent.

The global rally that has characterised most of this year had already taken a knock after US Trade Representative Robert Lighthizer told lawmakers that “real progress” had been made in trade talks with China, but a lot of work was still needed before a pact is signed.

– Chinese economic gloom –

In a sign that the ongoing trade spat is hurting protagonists, gloomy data showed Chinese manufacturing activity contracted for a third straight month in February, with factories hit by the long Lunar New Year break, concerns about slowing growth and uncertainty from the trade row.

However, Zhou Hao, a senior emerging markets economist at Commerzbank AG, said the results were likely not as bad as they seemed and the outlook could be positive.

“I think we still want to wait for the next month’s reading as this month’s is distorted by the holiday,” he said.

“Also the economy could stabilise this month. Rising input prices suggest that there is no need to worry about deflation, so the question now rests on whether the economy has enough impetus.”

Nervousness continues to stalk trading floors after Pakistan and India said they had shot down each other’s fighter jets on Wednesday, fuelling worries of a conflict between the nuclear-armed neighbours.

– Key figures around 1640 GMT – 

London – FTSE 100: DOWN 0.2 percent at 7,089.84 points (close)

Frankfurt – DAX 30: UP 0.3 percent at 11,515.64 (close)

Paris – CAC 40: UP 0.3 percent at 5,240.53 (close)

EURO STOXX 50: UP 0.5 percent at 3,298.26

New York – Dow: DOWN 0.1 percent at 25,970.98

Tokyo – Nikkei 225: DOWN 0.8 percent at 21,385.16 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 28,633.18 (close)

Shanghai – Composite: DOWN 0.4 percent at 2,940.95 (close)

Pound/dollar: DOWN at $1.3306 from $1.3309

Euro/pound: UP at 85.61 pence from 85.43 pence

Euro/dollar: UP at $1.1392 from $1.1370 at 2200 GMT

Dollar/yen: UP at 111.35 yen from 111.00 yen

Oil – Brent Crude: DOWN 17 cents at $66.41 per barrel

Oil – West Texas Intermediate: UP 19 cents at $57.13

burs-jh/bp

Disclaimer: This story is published from a syndicated feed. Siliconeer does not assume any liability for the above story. Validity of the above story is for 7 Days from original date of publishing. Content copyright AFP.