Geopolitical concerns ahead of G-20 weigh on global stocks
Tensions over recent North Korea's missile launch and unease ahead of the upcoming meeting of the Group of 20 leading industrial and developing countries weighed on global stock markets Thursday. Meanwhile, oil prices recouped some of their previous day's hefty losses.
KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was down 0.8 percent at 7,310 while Germany's DAX fell 1 percent to 12,328. The CAC 40 in France was 1.3 percent lower at 5,115. Wall Street was poised for a lower opening, with Dow futures and the broader S&P 500 futures down 0.5 percent.
GEOPOLITICS: With global leaders, including U.S. President Donald Trump and Russian President Vladimir Putin, set to arrive for a G-20 summit in Hamburg, Germany, traders are cautious, not least because the meeting takes place in the wake of Pyongyang's recent missile test. On Thursday, South Korean jets and navy ships fired missiles into the ocean during drills, a display of military power two days after North Korea test-launched its first intercontinental ballistic missile. The North's ICBM launch, its most successful missile test to date, has stoked security worries in Washington, Seoul and Tokyo as it showed the country could eventually perfect a reliable nuclear missile capable of reaching the United States.
G-20: Meanwhile, competing visions of world trade are set to collide at the G-20 summit. Trump's "America First" approach will face off against the European Union, which on Thursday agreed on a broad free trade deal with Japan.
ANALYST TAKE: "The world seems to be at loggerheads, and this flow of negativity means that bullish sentiment is being held firmly in check," said Chris Beauchamp, chief market analyst at IG.
FED MINUTES: Minutes from the Federal Reserve's June meeting showed policymakers are weighing when to start letting its $4.5 trillion bond portfolio shrink, a major turning point for the U.S. economy. Some Fed officials want to announce the start of that process within a few months, while others want to wait longer.
ASIA'S DAY: Japan's Nikkei 225 fell 0.4 percent to 19,994.06 while South Korea's Kospi edged down less than 0.1 percent to 2,387.81. Hong Kong's Hang Seng index shed 0.2 percent to 25,465.22. China's Shanghai Composite Index added 0.2 percent to 3,212.44. Australia's S&P/ASX 200 gave up 0.1 percent to 5,758.80.
OIL: Another reason why stocks have been choppy is related to the volatility in oil markets. On Thursday, benchmark U.S. crude added 68 cents to $45.81 per barrel in electronic trading on the New York Mercantile Exchange, a day after it slumped $1.94, or 4.1 percent. Brent crude, used to price international oils, rose 72 cents to $48.51 per barrel in London. In the previous session, it sank $1.82, or 3.7 percent, to $47.79 a barrel.
CURRENCIES: The euro was up 0.3 percent at $1.1383 while the dollar rose 0.1 percent to 113.41 yen.