Global Stocks Fall as Investors Parse Trade Developments – Wall Street Journal

  • Hang Seng falls into bear market
  • Trade in focus
  • Crude oil gains

Stocks mostly fell around the world Tuesday as investors continued to eye developments on global trade.

The Stoxx Europe 600 edged down 0.3% midday following its biggest gain of the month, while stocks in Asia closed mixed. Futures pointed to a 0.3% opening loss for the S&P 500 after it snapped a four-session losing streak Monday thanks to gains among industrial and technology companies.

With little on the economic calendar Tuesday, trade negotiations remained in focus for many market participants, analysts said. Stocks moved lower following media reports that China will ask the World Trade Organization for permission to impose sanctions on the United States.

When it comes to trade disputes, “from an economic standpoint, there is very little potential upside but there is a lot of potential downside,” said Abi Oladimeji, chief investment officer at Thomas Miller Investment. “That clearly is a negative, especially at a time whenI think the global growth outlook is quite precarious.”

Separately, top trade officials from the U.S. and the European Union were in Brussels Monday working on a pact that would deliver on their presidents’ earlier agreement to avert a trans-Atlantic economic fight by slashing tariffs and boosting commerce.

U.S. Trade Representative Robert Lighthizer and European Trade Commissioner Cecilia Malmströmsaid they had a “constructive” and “forward-looking” encounter, but provided no details. The two will look to complete a framework in November, the USTR said.

The British pound was up Tuesday, denting the multinational-heavy FTSE 100 on positive Brexit comments from European Union chief negotiator Michel Barnier.


Photo:

Dan Kitwood/Getty Images

“Europe is a very export-oriented economy, and trade is probably more important to Europe than it is to the U.S.,” said Eddie Perkin, chief equity-investment officer at Eaton Vance, noting trade worries have been an overhang on the region in recent weeks but that valuations were starting to look attractive.

Meanwhile, the British pound continued its ascent following reported comments from European Union chief negotiator Michel Barnier that hopes of a potential Brexit deal in the next six-to-eight weeks were realistic.

The pound recently was up 0.1% at $1.3033, denting the U.K.’s multinational-heavy FTSE 100 index as a stronger currency tends to lead to reduced translated earnings.

Shares of oil-and-gas companies were the best performers in Europe as Brent crude oil rose 0.7% to $77.89 a barrel.

In Asia-Pacific trading, Japan’s Nikkei led gains in the region as the dollar strengthened slightly against the yen and energy companies gained, while Australia’s S&P ASX 200 was up 0.6%.

Hong Kong’s Hang Seng fell into bear market territory, defined as a 20% drop from a recent closing high. Shares of Sands China and Galaxy Entertainment Group, which operate casinos in Macau, were among the biggest fallers amid recent concerns about a slowdown in China and cautious comments about the outlook from Suncity, while

Geely Automobile Holdings

fell 4.9%.

Government bonds were under modest pressure, with 10-year U.S. Treasury yields rising slightly to 2.95% from 2.94% late Monday afternoon and their German counterparts rising to 0.42% from around 0.41%. Yields move inversely to prices.

Write to Riva Gold at riva.gold@wsj.com