|03 July, 2019

Wednesday outlook: Asian shares drop on threat of sanctions on European goods

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.3% lower, while U.S. stocks edged higher overnight

A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China February 13, 2019. REUTERS/Stringer Image used for illustrative purpose

A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China February 13, 2019. REUTERS/Stringer Image used for illustrative purpose

  • Asian shares drop, U.S. stocks edge higher
  • Oil prices rise on OPEC+ decision
  • Tadawul retreats after five sessions of gains
  • Dollar retreats, gold prices surge

Global markets

Asian shares retreated in early trading on Wednesday as fresh concerns over the United States’ threat of tariffs on additional European goods weighed on investor sentiment.

The U.S. Trade Representative’s office released a list of additional European products that could be subject to tariffs, on top of products worth $21 billion that were announced in April.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.3% lower, while Japan’s Nikkei slipped 0.6% in early trade.

U.S. stocks managed modest gains on Tuesday, with the S&P 500 gaining 0.29%.

Oil prices

Oil prices edged higher early on Wednesday, supported by extended output cuts by the Organization of the Petroleum Exporting Countries and its allies.

OPEC and other producers such as Russia, a group known as OPEC+, agreed on Tuesday to extend oil supply cuts until March 2020 as members overcame differences to try to prop up prices.

Brent crude futures LCoc1 for September delivery were trading up 36 cents, or 0.6%, at $62.76 a barrel by 0244 GMT.

U.S. crude futures for August CLc1 were up 29 cents, or 0.5%, at $56.54 a barrel.

“The OPEC+ meeting showed the members sticking together in tough times, characterized by weakening global demand outlook, aiming for a more balanced oil market, despite clear market share implications,” said Amarpreet Singh, analyst at Barclays Commodities Research in a note, according to a Reuters report.

Middle East markets

Saudi Arabia’s index was down 0.2% on Tuesday with Al Rajhi Bank shedding 0.7% and Samba Financial Group falling 1.5%. The index snapped a five-day winning streak on Tuesday as most banks dropped.

In Dubai, the index was up 0.2%, lifted in part by a 0.7% rise in market heavyweight developer Emaar Properties.

The Abu Dhabi index traded flat with Abu Dhabi Commercial Bank adding 0.6%.

Qatar's index edged up 0.2% with banks leading the way. Qatar Islamic Bank advanced 1.2% and Doha Bank leapt 4.3%.

Egypt’s EGX30 rose 0.3 percent, Kuwait’s premier market index rose 1 percent while Oman’s index dropped 0.5 percent and Bahrain’s index added 1 percent.

Currencies

The dollar dropped on Wednesday.

The dollar index .DXY, which measures the greenback against a basket of six major currencies was a shade lower at 96.697.

Precious metals

Gold prices rose sharply on a weaker dollar.

Spot gold rose 1.1% at $1,433.50 per ounce at 0144 GMT.

U.S. gold futures were up 2.1% at $1,437.7 an ounce.

Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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© ZAWYA 2019

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