Dow Falls 391 Points Amid US-China Trade Woes, Hong Kong Protests

13 August, 2019, 21:24 | Author: Regina Silva
  • Wall Street set to open lower as trade war stokes fears of recession

Lower open expected for Wall Street Tuesday after the US stock index futures looked lower on Tuesday morning.

Aug 12 (Reuters) - Wall Street's main indexes fell on Monday as protests in Hong Kong added to concerns on the pace of growth in China, already under pressure from the prolonged bout of US trade tensions that have dominated financial markets this year.

Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney all retreated.

The S&P 500 stock index and the tech-heavy Nasdaq composite each lost 1.2%, with the S&P 500 closing at 2,882 and the Nasdaq closing at 7,863.

The Stoxx Europe 600 Index fell for a third day, dragged down by industrial and banking shares, while contracts on the three major USA equity indexes swung between gains and losses.

Coach owner Tapestry Inc and Versace owner Capri dropped 4.1% and 4.3%, respectively, after Chinese social media took the companies to talks for selling T-shirts that showed Chinese-controlled territories of Hong Kong and Macau as countries.

Hong Kong's Hang Seng sank as protesters crowded into Chek Lap Kok airport.

Beijing's use of the term terrorism "triggered a wave of risk aversion across global markets", said Stephen Innes of VM Markets in a report.

The Dow closed 391 points lower on Monday, even as fears that ongoing tensions between the USA and China could lead to a global recession mounted.

Stocks fell at the start of trade Monday, building on the previous week's decline on lingering worries over U.S.

The S&P 500 Index rose 1.4% as of 9:54 a.m.

Stocks in Singapore shed 1.1 per cent to reach their lowest since June 6 after the government slashed its full-year economic growth forecasts.

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USA to delay China tariffs on some products, including laptops, cell phones
Those items will be subjected to the tariffs starting December 15. "We're doing this for the Christmas season", Trump stated. Investors are taking the move as a sign of optimism for negotiations, but there may be far more cynical factors at play.

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The yen was steady at 105.38 per dollar after rising for fourth day.The offshore yuan was stable at 7.0926 per dollar.Bloomberg Dollar Spot Index was flat.The euro was trading at $1.1205, down 0.1%. The wild swings follow President Donald Trump's threat to impose more tariffs on Chinese goods, followed by China's move to allow its currency to weaken.

The new tariff would go into effect September 1 and more directly affect U.S. consumers.

Wall Street was set to open lower on August 12, as investors shunned risky bets on fears that a drawn-out trade war between the United States and China could force the global economy into recession.

Escalating protests in Hong Kong and a crash in the Argentine peso drove are driving investors to "safe havens" such as bonds, gold, and the Japanese yen. South Korea's Kospi index added 0.5%.

"It's a number of different things that's weighing on sentiment today, it's a mix of everything", said David Madden, analyst at CMC Markets in London. Shares fell 0.4% Monday.

Italian markets had tumbled last week when Salvini pulled his support from the coalition arrangement at the center. Treasury yields steadied after Monday's slide.

Second-quarter earnings season will be all but in the books after this week.

Shares of cannabis producer CannTrust fell as much as 25% on Monday after Health Canada rated one of its facilities in Vaughan, Ontario non-compliant.

Shares of tour operator TUI rose over 3 percent after it said robust business outweighed problems with the grounding of Boeing's 737 MAX jets in the third quarter and upheld its annual earnings outlook.

China-sensitive stocks including Caterpillar, Deere and Boeing all declined more than 1%.

The contract gained 43 cents on Monday to close at $54.93. Brent crude, used to price global oils, declined 11 cents to $58.46 per barrel in London.



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