Global Stocks Follow Wall Street Lower
June 12 2019 - 6:45AM
Dow Jones News
By Nathan Allen
Global stocks dropped on Wednesday, a day after Wall Street
indexes broke a weeklong winning streak amid lingering trade
tensions and questions over the direction of Federal Reserve
policy.
In Europe, the Stoxx Europe 600 was down 0.4% in midmorning
trade, while Germany's DAX slipped 0.4% and the U.K.'s FTSE 100
fell 0.5%.
Energy shares fared the worst, with the Stoxx Europe 600's
oil-and-gas subindex trading 1.5% lower amid concerns of oversupply
and lower appetite for volatile assets.
Data from the American Petroleum Institute showed that U.S.
crude stockpiles climbed more than expected last week, and the U.S.
Energy Information Administration lowered its forecasts for 2019
demand growth, sending global oil benchmark Brent crude down 2.7%
to $60.63 a barrel.
Germany's Axel Springer was the biggest gainer on the
pan-European index after U.S. private-equity firm KKR bid EUR63 a
share for the media group, driving its shares 12% higher.
In Asia, China's Shanghai Stock Exchange dropped 0.6%, Korea's
Kospi fell 0.1% and Japan's Nikkei 225 fell 0.4%
Hong Kong's Hang Seng was the region's worst performer, dropping
1.7% as protesters blocked access to the legislature, forcing
lawmakers to postpone debate on an unpopular bill that would allow
people to be extradited to China.
Property developers led the declines in Hong Kong after Chinese
developer Goldin Financial on Tuesday pulled its $1.4 billion
winning bid to redevelop a former airport, citing "social
contradiction and economic instability."
The property subindex of the Hang Seng fell 2.8% and major
builders such as Sun Hung Kai and Henderson Land dropped between 2%
and 3%.
U.S. futures pointed to opening declines of 0.2% for the S&P
500 and the Dow Jones Industrial Average, extending yesterday's
modest losses. Both indexes fell less than 0.1% on Tuesday.
Equity markets in the U.S. had risen sharply in the prior week
after Federal Reserve officials hinted that the central bank might
lower interest rates to offset the negative effects of trade
disputes. However, some analysts say markets may have overestimated
the likelihood of such a rate cut, given recent positive economic
data.
Ipek Ozkardeskaya, senior market analyst at London Capital
Group, said heightened expectations of a rate cut may now force the
Fed to act sooner than intended to avoid disappointing the market
and driving up stock-market volatility over the summer.
Later Wednesday, investors will be watching for May consumer
inflation data in the U.S., which are expected to rise 0.1% from
April's level -- the smallest monthly gain since January. Weak
inflation is likely to fuel further speculation over the Fed
cutting rates and may weigh on the dollar, according to forex
broker FXTM.
The yield on 10-year U.S. Treasurys slipped to 2.120% on
Wednesday from 2.140% on Tuesday. Bond yields move in the opposite
direction to prices.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was flat, while gold gained 0.7% to $1,340.90 an
ounce.
Joanne Chiu contributed to this article.
(END) Dow Jones Newswires
June 12, 2019 06:30 ET (10:30 GMT)
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