World markets mixed on trade, Brexit tensions

SINGAPORE – World markets were mixed on Friday as trade tensions and political risks surrounding Britain’s exit from the European Union weighed on sentiment.

KEEPING SCORE: France’s CAC lost 0.6 per cent in early trading to 5,063.51 while Germany’s DAX was up 0.5 per cent at 11,413.54. Britain’s FTSE 100 gained 0.3 per cent to 7,058.10. Wall Street was set for a pessimistic open. Dow futures dropped 0.3 per cent to 25,242.00. S&P 500 futures were 0.4 per cent lower at 2,724.50.

ASIA’S DAY: Japan’s Nikkei 225 index lost 0.6 per cent to 21,680.34 while the Hang Seng in Hong Kong added 0.3 per cent to 26,183.53. South Korea’s Kospi rose 0.2 per cent to 2,092.40. Australia’s S&P ASX 200 was 0.1 per cent lower at 5,730.60. The Shanghai Composite index edged 0.4 per cent higher to 2,679.11. Shares in Southeast Asia were mostly higher.

CHINA-U.S. TRADE: Markets were boosted by a Financial Times report citing unnamed sources that said the United States’ trade representative, Robert Lighthizer, has told some executives that a planned escalation in January of U.S. tariffs on imported goods from China are now on hold. The Trump administration has imposed a 10 per cent tariff on $200 billion of Chinese goods over complaints Beijing steals or pressures foreign companies to hand over technology as the price of market access. That tariff had been due to rise to 25 per cent in January. Another $50 billion of Chinese goods already is subject to 25 per cent duties. Beijing has responded with penalty duties on $110 billion of American goods. Washington and Beijing resumed talks over their spiraling trade dispute this week ahead of a meeting between Presidents Xi Jinping and Donald Trump, China’s Commerce Ministry said Thursday.

BREXIT: On Thursday, discord over British Prime Minister Theresa May’s plan for Britain’s departure from the European Union next year shook major European stock indexes and the pound. She persuaded a majority in her Cabinet to back an agreement that would allow Britain to stay in a customs union while a trade treaty is negotiated, but the deal faces an uncertain fate in Parliament and two of her Cabinet ministers, including the Brexit minister, resigned in protest.

ANALYST’S TAKE: “For the pound, Brexit is no longer simply about a deal or no deal but evolving into an existential crisis regarding the kingdom’s unity,” DBS Group Research said in a market commentary.

ENERGY: Benchmark U.S. crude oil rose 66 cents to $57.12 per barrel in electronic trading on the New York Mercantile Exchange. It added 0.4 per cent to settle at $56.46 a barrel on Thursday. Brent crude, used to price international oils, gained 94 cents to $67.56 a barrel. Despite the latest uptick, U.S. crude oil is still down about 13.5 per cent for the month.

CURRENCIES: The dollar slipped to 113.35 yen from 113.64 yen on Thursday. The euro strengthened to $1.1349 from $1.1326. The pound steadied at $1.2788, up from $1.2771.