Stocks Slip on Thursday 01/17 05:49
World markets were mostly lower Thursday on renewed concern over the outlook
for China's economy after some provinces lowered their growth targets for 2019.
SINGAPORE (AP) -- World markets were mostly lower Thursday on renewed
concern over the outlook for China's economy after some provinces lowered their
growth targets for 2019. Traders also fear a reported U.S. investigation of
China's Huawei could derail talks aimed at ending a trade war between the
world's two largest economies.
KEEPING SCORE: In Europe, Germany's DAX fell 0.4 percent at 10,885.03 and
France's CAC 40 retreated 0.2 percent to 4,799.14. Britain's FTSE 100 sank 0.4
percent to 6,837.58. Wall Street was set for early losses, with Dow futures 0.3
percent lower at 24,069.00. S&P 500 futures fell 0.4 percent to 2,602.80.
ASIA'S DAY: Hong Kong's Hang Seng dropped 0.5 percent to 26,755.63 and the
Shanghai Composite index lost 0.4 percent to 2,559.64. Japan's Nikkei 225 index
edged 0.2 percent lower to 20,402.27 while Australia's S&P ASX 200 rose 0.3
percent to 5,850.10. South Korea's Kospi added 0.1 percent to 2,107.06. Shares
rose in Taiwan, Thailand and Indonesia but fell in Singapore.
CHINESE GROWTH: On Wednesday, the Hong Kong newspaper South China Morning
Post reported that eight Chinese provinces have lowered their growth targets
for 2019. This is out of 12 provinces which have published their forecasts so
far. According to the report, Henan, home to the world's largest iPhone
factory, now hopes for growth of 6.5 percent, down from 7.5 percent. Previous
reports have claimed China intends to downgrade its growth target from around
6.5 percent, to a range of 6 to 6.5 percent. The government is due to release
economic data for the last quarter of 2018 on Monday.
US-CHINA TENSIONS: A Wall Street Journal report, citing people familiar with
the matter, said federal prosecutors were investigating China's Huawei
Technologies Ltd. for allegedly stealing trade secrets from American companies
including T-Mobile. The report said the investigation resulted from several
civil lawsuits against Huawei and an indictment could be issued soon. This
revived worries over relations between the two countries as officials struggle
to find a compromise ahead of the Mar. 1 end of a moratorium on raising tariffs
against each other's exports. Negotiators from both countries recently held
trade talks in Beijing and more high level negotiations are in the works.
ANALYST'S TAKE: Suggestions that the U.S. is investigating Huawei "raise
questions about whether trade optimism is premature and crucially, whether more
fundamental and strategic tensions between the U.S. and China induce a
longer-term, slow-burn drag," Vishnu Varathan of Mizuho Bank said in an
BREXIT HURDLE: On Wednesday, British Prime Minister Theresa May survived a
no-confidence vote by a narrow margin of 325 to 306. This comes after lawmakers
rejected a deal she brokered for Britain's exit from the European Union. May
has said she will talk to opposition parties and other lawmakers to come up
with a Plan B. Leaving the bloc without a deal on March 29 is expected to be
damaging for the economy.
ENERGY: Benchmark U.S. crude oil fell 28 cents to $52.03 per barrel in
electronic trading on the New York Mercantile Exchange. The contract gained 20
cents to settle at $52.31 per barrel on Wednesday. Brent crude, the
international standard, dropped 19 cents to $61.13. It added 68 cents to $61.32
a barrel in London.
CURRENCIES: The dollar fell to 108.83 yen from 109.13 yen late Wednesday.
The euro rose to $1.1397 from $1.1394, while the British pound eased to $1.2872