Global stocks fall on escalating US-China tensions - BNN

Stocks fell with U.S. equity futures on Friday amid concern over escalating Sino-American tensions and worries the recovery in the world’s largest economy has stalled. Five-year Treasury yields touched an all-time low before bouncing back.

The Stoxx Europe 600 Index slumped, heading for its first weekly decline in four, and shares in China bore the brunt of losses as Beijing ordered the U.S. to shut a consulate in a tit-for-tat retaliation. Tech stocks weighed on the European gauge after Intel Corp.’s warning on a production delay, sending the company’s shares down more than 10 per cent in pre-market trading. Centrica Plc rose by a record after it said it was selling its North American energy business.

Gold traded near US$1,900 an ounce, close to an all-time high. The dollar extended this week’s slide, and the offshore yuan dipped. European bonds fell after U.S.Treasuries turned lower.

Beijing’s latest move further strains the increasingly fraught relationship with the U.S., which forced China to leave its mission in Houston earlier this week. The two superpowers have also recently clashed on trade and early handling of the coronavirus, raising fears of a protracted conflict.

“We won’t be surprised if there is some sell-off because investors are shifting focus back to this geo-political tension,” Janet Mui, an investment director at Brewin Dolphin, said on Bloomberg TV.

Also hitting sentiment was the first uptick in U.S. jobless claims since March on Thursday. While European manufacturing data for July showed a return to growth, firms cut jobs for a fifth straight month. Earnings beats keep rolling in, though they’re coming against low expectations.

These are the main moves in markets

Stocks

• Futures on the S&P 500 Index decreased 0.3 per cent as of 10:29 a.m. London time.
• The Stoxx Europe 600 Index sank 1.7 per cent.
• The MSCI Asia Pacific Index dipped 0.9 per cent.
• The MSCI Emerging Market Index dipped 1.6 per cent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2 per cent.
• The euro increased 0.1 per cent to US$1.1604.
• The British pound was little changed at US$1.2736.
• The onshore yuan weakened 0.2 per cent to 7.017 per dollar.
• The Japanese yen strengthened 0.5 per cent to 106.36 per dollar.

Bonds

• The yield on 10-year Treasuries gained one basis point to 0.59 per cent.
• The yield on two-year Treasuries dipped less than one basis point to 0.15 per cent.
• Germany’s 10-year yield climbed two basis points to -0.46 per cent.
• Britain’s 10-year yield gained one basis point to 0.133 per cent.
• Japan’s 10-year yield was unchanged at 0.019 per cent.

Commodities

• West Texas Intermediate crude gained 0.8 per cent to US$41.41 a barrel.
• Brent crude increased 0.7 per cent to US$43.62 a barrel.
• Gold strengthened 0.4 per cent to US$1,894.31 an ounce.

--With assistance from Matt Turner and Adam Haigh

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2020-07-24 10:12:36Z
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