Global markets lower amid China, Afghanistan unease

Global markets lower amid China, Afghanistan unease

Beijing : Global stock markets and Wall Street futures sank Tuesday amid turmoil in Afghanistan and unease about China’s economic outlook after weak July activity.

Investors looked ahead to a speech by Federal Reserve Chairman Jerome Powell for an update on the health of the biggest global economy. Traders also awaited U.S. retail sales and factory data.

Markets in London and Frankfurt opened lower. Shanghai, Tokyo and Hong Kong retreated.

On Wall Street, futures were lower a day after the benchmark S&P 500 hit a new high despite rising U.S. coronavirus infections.

Traders got some positive sentiment from Wall Street but were paying close attention to the situation in Afghanistan, Anderson Alves of ActivTrades said in a report.

Landlocked Afghanistan’s economy is tiny, but other governments were caught off guard by the speed of the collapse of its U.S.-allied leadership. Thousands of people tried to flee the country after the Taliban seized the capital, Kabul.

Markets also were digesting news that Chinese factory output, consumer spending and investment grew more slowly in July than expected.

The government blamed flooding in central China and controls on travel and business to fight outbreaks of the coronavirus’s delta variant.

That depressed oil prices as traders adjusted forecasts of Chinese demand.

Beijing’s policy of pursuing zero virus cases points towards the risk of aggressive measures that may continue to put a cap on growth, Yeap Jun Rong of IG said in a report.

In early trading, the FTSE 100 in London was down less than 0.1per cent at 7,150.25. The DAX in Frankfurt declined 0.3per cent to 15,871.65 and the CAC 40 in Paris sank 0.5per cent to 6,804.12.

On Wall Street, futures for the S&P 500 index and the Dow Jones Industrial Average were off 0.4per cent.

On Monday, the S&P 500 and Dow both rose 0.3per cent while the Nasdaq fell less than 0.1per cent.

In Asia, the Shanghai Composite Index lost 2per cent to 3,449.98 and the Hang Seng in Hong Kong sank 1.6per cent to 25,750.45. The Nikkei 225 in Tokyo slipped 0.4per cent to 27,424.47 after spending most of the day in positive territory.

The Kospi in Seoul retreated 0.9per cent to 3,143.09 and Sydney’s S&P-ASX 200 shed 0.9per cent to 7,511.01.

India’s Sensex gained less than 0.1per cent to 55,624.76. New Zealand, Singapore and Jakarta declined while Bangkok gained.

On Wall Street, technology and health care stocks accounted for much of the gain in the S&P 500.

Sectors traditionally considered lower risk, including utilities and companies that make food and personal goods, also helped lift the market. Those gains outweighed a pullback in banks, energy stocks and a swath of retailers and travel sector companies.

Analysts had expected U.S. economic growth to slow from its breakneck pace earlier this year, but the highly contagious delta variant has prompted even more caution from investors.

In energy markets, benchmark U.S. crude lost 44 cents to USD66.83 per barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract dropped USD1.15 to USD67.29.

Brent crude, used to price international oils, shed 45 cents to USD69.06 per barrel in London. It lost USD1.08 to USD69.51.

The dollar rose to 109.32 yen from Monday’s 109.24 yen. The euro declined to USD1.1769 from USD1.1776. (AP)

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