|29 May, 2019

Wednesday outlook: Asian shares drop on Trump's China comments

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.5%

U.S. President Donald Trump looks at supporters before boarding Air Force One after addressing a Trump 2020 re-election campaign rally in Montoursville, Pennsylvania, U.S. May 20, 2019.

U.S. President Donald Trump looks at supporters before boarding Air Force One after addressing a Trump 2020 re-election campaign rally in Montoursville, Pennsylvania, U.S. May 20, 2019.

REUTERS/Carlos Barria
  • Asian shares retreat following 3 straight days of gains
  • Oil prices follow equities lower
  • Gulf markets add gains on Tuesday
  • Dollar, gold steady

Global markets

Asian shares dropped on Wednesday, as trade tensions between the United States and China weighed on sentiment.

U.S. President Donald Trump said on Monday that Washington was not ready to make a deal with China yet. At the same time, he pressed Japan to reduce its trade imbalance with the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5% after three straight days of gains. Chinese shares started on the back foot with the blue-chip CSI300 off 0.5%.

Oil prices

Oil prices tracked equities lower on Wednesday.

Front-month Brent crude futures, the international benchmark for oil prices, were at $69.60 a barrel at 0332 GMT, down 51 cents, or 0.7%, from the last session’s close.

U.S. West Texas Intermediate (WTI) crude futures were at $58.50 per barrel, down 64 cents, or 1.1%, from their last settlement.

“Crude oil was weak ... primarily as the bears on demand are winning compared to the bulls on supply,” James Mick, managing director and energy portfolio manager with U.S. investment firm Tortoise, said in an investor podcast, a Reuters report said.

“Investors are concerned from a macro perspective about worldwide demand, particularly in the face of the growing trade dispute between the U.S. and China,” he said.

Middle East markets

Saudi Arabia’s index rose 2 percent as Al Rajhi Bank increased 2.1% and petrochemical maker Saudi Basic Industries added 2%. MSCI said this month it would include MSCI Saudi Arabia in its emerging-markets index, effective from Tuesday's close.

In Dubai, the index was up 1.2%, led higher by real estate stocks. Major developer Emaar Properties traded 4.2% higher while its unit Emaar Malls closed 4.9% up in heavy trade.

The Abu Dhabi index was also up 0.3%, with Dana Gas gaining 4.5.% and Abu Dhabi Commercial Bank climbing 3%.

The Qatari index rose 1.2% with blue-chip lender, Qatar National Bank, adding 1.8%.

Egypt’s blue-chip index EGX30 gained 0.5 percent, Kuwait’s premier market index gained 1 percent while Oman’s index added 1.4 percent and Bahrain’s index added 1 percent.

Currencies

The dollar steadied on Wednesday as equities dropped.

The dollar index, which measures the greenback against a basket of six major currencies, was steady at 97.929, having ended up 0.3% overnight.

Precious metals

Gold prices firmed on Wednesday.

Spot gold was unchanged at $1,279.12 per ounce, as of 0123 GMT.

U.S. gold futures were up 0.2% at $1,279.70 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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