Wednesday July 4th

4-07-2018

European markets edge higher; Trade war concerns weigh on tech stocks; Danske Bank slips 3%

The pan-European Stoxx 600 edged up 0.2 percent during lunchtime deals, with most sectors and major bourses in positive territory. Trading volumes were lighter than usual because U.S. financial markets were closed for the Independence Day holiday. Europe's technology stocks led the losses, down around 1 percent after a slide in U.S. chip makers overnight. U.S. peer Micron was banned from selling chips in China late Tuesday, as heightened fears over trade frictions prompted a slump in global tech shares. Europe's STMicroelectronics and Siltronic were the worst sectoral performers, both down over 2 percent. Asian stocks closed in negative territory on Wednesday, with China markets failing to sustain gains notched in the last session as trade jitters continued to simmer ahead of a deadline when tariffs are due to take effect. In Japan, the Nikkei 225 declined 0.31 percent, or 68.50 points, to close at 21,717.04, notching a third consecutive session of declines. South Korean stocks failed to hold onto early gains, with the Kospi closing lower by 0.32 percent at 2,265.46. Meanwhile, Hong Kong's Hang Seng Index fell 1.08 percent by 3:13 p.m. HK/SIN, extending the previous session's losses, with the heaviest declines seen in the energy and real estate sectors. On the mainland, the Shanghai composite tracked lower once again, falling 0.94 percent to close at 2,760.59 after recording late gains in the previous trading session. The smaller Shenzhen composite suffered a heavier drop, closing down by 1.96 percent. Brent crude oil edged up on Wednesday after a second successive drop in U.S. crude inventories driven by an outage at the Syncrude Canada oil sands facility, which usually supplies the United States. Brent crude futures were up 7 cents at $77.83 a barrel by 0915 GMT, while U.S. crude futures were down 17 cents at $73.97 a barrel. U.S. crude inventories fell by 4.5 million barrels to 416.9 million barrels in the week to June 29, the American Petroleum Institute (API) said on Tuesday. Gasoline and distillate stocks, also fell, the API said. Gold hit a one week high on Wednesday, rebounding from this week's seven-month low, helped by a softer dollar and smoldering trade tensions, though the move was limited ahead of Friday's U.S. jobs data. The dollar fell versus the euro and the yuan, with the Chinese currency continuing its recovery from 11-month lows after the central bank took steps to stem its rapid rise. A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors. "Gold has been trending lower for several weeks and this being non-farm payrolls (week) the dollar is likely to remain in range, so people are taking profit on dollar and gold positions," said Fawad Razaqzada, an analyst at FOREX.com. "I'm still not convinced we've seen the lows so long as gold remains below $1,300. The dollar is on an upwards trajectory. I don't think (looming interest rate) hikes are priced into the dollar or gold." Spot gold was up 0.3 percent at $1,256.06 an ounce as of 1008 GMT after touching $1,261.10, a one-week high. The yellow metal has gained over $20 from Tuesday's low of $1,237.32 an ounce, its weakest since Dec. 12. U.S. gold futures for August delivery were trading 0.3 percent higher at $1,257.50 an ounce.