Stocks in Europe fall as rally spurred by Wall Street gains sputters.
SINGAPORE — European markets turned lower after a marginally higher open on Monday following an upbeat Asian session. All eyes were on talks in Beijing, where American and Chinese officials are haggling over a trade dispute that threatens to worsen an economic slowdown and put a drag on the global economy.
KEEPING SCORE: In Europe, Germany’s DAX lost 0.1 percent to 10,755.23 while France’s CAC 40 dropped 0.2 percent to 4,728.35. Britain’s FTSE 100 shed 0.2 percent to 6,825.18. Wall Street was set to build on gains from Friday. The future contract for the broad S&P 500 index was 0.1 percent higher at 2,534.00. That of the Dow Jones Industrial Average was up 0.2 percent at 23,440.00.
ASIA’S DAY: Japan’s benchmark, bouncing back from steep losses last week, started the day trading over 3 percent higher. The Nikkei 225 index gained 2.4 percent to 20,038.97, while South Korea’s Kospi gained 1.3 percent to 2,037.10. Australia’s S&P-ASX 200 added 1.1 percent to 5,683.20. Hong Kong’s Hang Seng climbed 0.8 percent to 25,835.70 and the Shanghai Composite index rose 0.7 percent to 2,533.09. Shares rallied in Taiwan and throughout Southeast Asia.
WALL STREET RALLY: U.S. indexes soared Friday after the Labor Department announced that employers added a better-than-expected 312,000 jobs in December. While the unemployment rate rose slightly, it was taken as a good sign that more people were looking for jobs. Gains were also supported by Federal Reserve Chairman Jerome Powell saying that the central bank will be flexible in deciding if and when it raises interest rates.
U.S.-CHINA TALKS: A U.S. delegation, led by Deputy U.S. Trade Representative Jeffrey Gerrish sat down for two days of talks with Chinese officials starting Monday. The Commerce Ministry did not give further details on who was leading Chinese negotiators or on the meeting’s agenda. No agreement was expected, but any progress on ending a dispute that has resulted in both sides imposing tariffs on billions of dollars’ of each other’s exports would be welcomed. Over the weekend, President Donald Trump told reporters at the White House that negotiations were going “very well” and investors are keen to see what comes next. The South China Morning Post, citing a person familiar with the matter, reported that Trump plans to meet Chinese Vice President Wang Qishan at the sidelines of the World Economic Forum in Switzerland, held on Jan. 22 to 25. Last month, Trump and Chinese leader Xi Jinping met and agreed to hold off on further tariffs for 90 days, to resolve a range of issues stemming from Beijing’s technology policy.
ANALYST’S TAKE: “The potential of movement on China-U.S. trade means a moderation of extreme bearishness around the outlook for global growth,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an interview. “Stronger U.S. jobs and wage data on Friday night are key fundamental contributors to the rally (in Asia),” he added.
ENERGY: U.S. crude oil added 91 cents to $48.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 1.8 percent to $47.96 a barrel on Friday. Brent crude, used to price international oils, gained $1.17 to $58.23 per barrel. It rose 2 percent to $57.06 per barrel in London.
CURRENCIES: The dollar weakened to 108.13 yen from 108.52 yen late Friday. The euro rose to $1.1444 from $1.1362.