The US and Chinese flags are displayed outside a hotel in Beijing earlier this week as uncertainty over protracted trade negotiations weighs on stocks (Greg Baker)
New York (AFP) – Wall Street finished a topsy-turvy session in the red Friday amid worries over US-China trade talks, while the pound fell to multi-month lows on renewed prospects of a no-deal Brexit.
US investors reacted negatively to media reports that described talks between the US and China as stalled following the White House’s move this week to block Chinese telecommunications company Huawei from the US.
That drew more confrontational rhetoric from Chinese government officials.
“It feels as though further discussions on trade have been put on hold,” said Art Hogan, chief market strategist at National Securities.
“Today it seems the door is shut” to further talks, he added.
Angst over China ultimately outweighed two other conciliatory steps by President Donald Trump on Friday on trade: the lifting of steel tariffs on Canada and Mexico, and a six-month delay on imposing tariffs on auto imports which has worried Europe and Japan.
Stocks in New York briefly rallied after data showed US consumer confidence at a 15-year high. But then shares weakened, especially in the last hour of trading, with the S&P 500 finishing with a loss of 0.6 percent for the day.
European stocks also closed lower, although London’s losses were minimal due to the latest pullback in the pound.
– ‘Hard’ Brexit ahead? –
The British currency fell to multi-month lows against the dollar and euro after Britain’s Labour opposition pulled out of key talks with Prime Minister Theresa May.
“The overriding fear for currency traders is that… a hard, no-deal Brexit is back on the table,” said Jasper Lawler, head of research at London Capital Group. “Soft Brexit optimism is fading, pulling the pound lower.”
After some sharp swings, sterling stands about 10 percent lower against the dollar and euro compared with just before the UK Brexit referendum in June 2016.
Opposition Labour leader Jeremy Corbyn said he would continue to oppose the government’s Brexit deal although he would “carefully consider any proposals the government wishes to bring forward to break the… deadlock”.
The announcement came after May agreed Thursday to set out a timetable early next month for her departure as prime minister amid uproar in her own Conservative Party.
MPs have three times rejected the divorce deal she struck with Brussels, weakening her authority and forcing her to reach out to Labour.
Parliament is due to vote for a fourth time in early June on the terms of Britain’s withdrawal from the EU.
An ashen-faced May said lawmakers would be faced with a “stark choice” of either voting to deliver Brexit, or “to shy away again.”
– Key figures around 2040 GMT –
New York – Dow: DOWN 0.4 percent at 25,764.00 (close)
New York – S&P 500: DOWN 0.6 percent at 2,859.53 (close)
New York – Nasdaq: DOWN 1.0 percent at 7,816.28 (close)
London – FTSE 100: DOWN 0.1 percent at 7,348.62 (close)
Frankfurt – DAX 30: DOWN 0.6 percent at 12,238.94 (close)
Paris – CAC 40: DOWN 0.2 percent at 5,438.23 (close)
EURO STOXX 50: DOWN 0.4 percent at 3,425.64 (close)
Tokyo – Nikkei 225: UP 0.9 percent at 21,250.09 (close)
Hong Kong – Hang Seng: DOWN 1.2 percent at 27,946.46 (close)
Shanghai – Composite: DOWN 2.5 percent at 2,882.30 (close)
Pound/dollar: DOWN at $1.2720 from $1.2798 at 2100 GMT
Euro/pound: UP at 87.70 pence from 87.32 pence
Euro/dollar: DOWN at $1.1156 from $1.1174
Dollar/yen: UP at 110.02 yen from 109.85 yen
Oil – Brent Crude: DOWN 41 cents at $72.21 per barrel
Oil – West Texas Intermediate: DOWN 11 cents at $62.76 per barrel
Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.