• Global markets drop again, trade tensions peak
  • Saudi Arabia’s index drops sharply, breaks below key technical support
  • Oil prices drop, tracking equities
  • The dollar retreats, gold prices add gains

Global markets

Asian shares dropped again on Thursday as trade tensions between the United States and China reached their peak as the public consultation period on the Trump administration’s intent to impose tariffs on an additional $200 billion of Chinese goods ends later in the day.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent to hit its lowest since mid-August

“An escalation of the U.S.-China trade war may be imminent, the timing is somewhat unclear and this justifies caution even given the (U.S. dollar) pullback,” JPMorgan analysts said, according to a Reuters report.

“Conviction and participation will likely remain light until an announcement.”

Overnight on Wall Street, the S&P 500 lost 0.3 percent and the Nasdaq Composite slipped 1.2 percent. The Dow edged up 0.1 percent.

Middle East markets

Abu Dhabi’s index lost 1.1 percent on Wednesday.

Abu Dhabi Commercial Bank (ADCB) shares dropped 4.620 percent to 7.63 dirhams a share on Wednesday while Union National Bank (UNB) rose sharply for the second session in a row, adding 11.74 percent to 4.95 dirhams a share, and was the best performer on the Abu Dhabi index.

The movement comes following ADCB’s announcement late on Monday that it had started “exploratory talks regarding a potential merger with Union National Bank”. It also added that “similar and separate discussions have also commenced with the shareholders of Al Hilal Bank.”

“UNB was trading at suppressed valuation before the announcement. We believe the deal would lead to value unlocking and would thus be more positive for UNB,” Chiro Ghosh, research manager at SICO, told Zawya.

“ADCB would be absorbing two banks with inferior asset quality and profitability. Unless the valuation is favorable towards ADBC, the bank has more to lose. The initial rally (on Tuesday) was driven on the expectation of synergies and more business from the larger equity book,” he added.

Dubai’s index dropped 0.7 percent as Emaar Properties fell 1.8 percent.

Saudi Arabia’s index was the main loser in the region, dropping 3.1 percent. The index fell below its 200-day average for the first time this year.

Egypt’s index dropped 1.1 percent, with real estate investment firm Talaat Mostafa Group Holding Co declining 2.3 percent.

Qatar’s index added 0.1 percent, Kuwait’s index gained 0.3 percent while Oman’s index was flat and Bahrain’s index fell 0.2 percent.

Oil prices

Oil prices dropped on Thursday, tracking a fall in equities, as sentiment was hit due to trade tensions between the U.S. and China.

U.S. West Texas Intermediate (WTI) crude futures were at $68.47 per barrel at 0031 GMT, down 25 cents, or 0.4 percent, from their last settlement.

International Brent crude futures fell 27 cents, or 0.4 percent, to $77.0 a barrel.

“The prospects of increased supplies from OPEC and her allies, and weaker demand from China and other emerging markets could weigh further on oil prices going forward, or at least limit the upside potential,” Fawad Razaqzada, market analyst at futures brokerage Forex, told Reuters.

Currencies

The dollar index against a basket of six major currencies retreated from two-week highs hit earlier this week to be last down 0.15 percent.

Sterling added 0.1 percent to $1.2918 GBP=D4 after rising 0.4 percent the previous day.

The U.S. currency dipped 0.15 percent to 111.37 yen

Precious metals

Gold prices rose on Wednesday as the dollar retreated, and as trade tensions between the U.S. and China peaked.

Spot gold was up 0.3 percent at $1,199.36 at 0229 GMT, after rising 0.5 percent in the previous session.

U.S. gold futures rose 0.3 percent at $1,205 an ounce.

 

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(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)

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