London (AFP) – Stock markets diverged on Monday as investors eyed a busy earnings week and awaited fresh developments in US trade deals before an August 1 tariffs deadline. The yen gained after Japanese Prime Minister Shigeru Ishiba said he would stay in office despite another election defeat.
“As we start a new week, the focus is once again on tariffs and earnings reports,” said Kathleen Brooks, research director at trading group XTB. She warned that if tariff rates surged for the United States’ major trading partners — the European Union, Canada, and Mexico — then “the limited impact of tariffs on economic growth so far may not last.”
London, Paris, and Frankfurt stock markets dipped in midday deals, following a largely positive session in Asia. While only three countries have signed agreements to avoid the worst of US President Donald Trump’s tariffs, there was some optimism among investors that others, including Japan and South Korea, would follow suit.
US Commerce Secretary Howard Lutnick told CBS News over the weekend that he was “confident” that a trade deal would be reached with the EU. “Even if the European Union reaches an agreement with the US, it is likely that only a framework deal will be presented, requiring further negotiations on the details,” said Jochen Stanzl, chief market analyst at CMC Markets. “Realistically, there is a high probability that uncertainty will persist beyond August 1,” he added.
The European Central Bank this week is set to hold interest rates, for the first time in almost a year, when policymakers meet. In Asia, most stock markets advanced, led by Hong Kong, which topped 25,000 points for the first time in three years after strong earnings from Taiwanese chip giant TSMC and news US titan Nvidia would be allowed to export key semiconductors to China.
Shanghai also gained on Monday, while Tokyo was closed for a holiday. The yen strengthened against the dollar after Ishiba vowed to stay on even after his ruling coalition lost its overall majority in Sunday’s lower house elections, months after it suffered a similar fate in an upper house vote. Analysts said that while the result was bad for the Liberal Democratic Party and its partner Komeito, the prime minister’s pledge to stay in office provided some stability for now.
The Japanese currency had been weighed in recent weeks by expectations a bad defeat would lead to more spending and tax cuts. The political turbulence also comes as Ishiba struggles to reach a trade deal with Trump, who has threatened tariffs of 25 percent on goods from Japan.
In company news, shares in Jeep maker Stellantis fell almost two percent in Paris after it reported a massive first half loss as US tariffs hit. Irish no-frills carrier Ryanair announced its first-quarter profit more than doubled thanks to higher fares.
– Key figures at around 1050 GMT –
London – FTSE 100: DOWN 0.1 percent at 8,985.46 points
Paris – CAC 40: DOWN 0.6 percent at 7,779.41
Frankfurt – DAX: DOWN 0.2 percent at 24,233.13
Hong Kong – Hang Seng Index: UP 0.7 percent at 24,994.14 (close)
Shanghai – Composite: UP 0.7 percent at 3,559.79 (close)
New York – Dow: DOWN 0.3 percent at 44,342.19 (close)
Tokyo – Nikkei 225: Closed for a holiday
Dollar/yen: DOWN at 147.82 yen from 148.73 yen on Friday
Euro/dollar: UP at $1.1640 from $1.1627
Pound/dollar: UP at $1.3452 from $1.3414
Euro/pound: DOWN at 86.52 pence from 86.67 pence
West Texas Intermediate: DOWN 0.3 percent at $67.14 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $68.93 per barrel
© 2024 AFP
