Asian Markets Fall As The Trump/Kim Summit Falls Apart
Most Asian-based indices were weaker in Thursday trading following the disintegration of the US-North Korea Summit. The meeting of U.S. President Donald Trump and North Korean dictator Kim Jong Un ended after two days with no agreement reached. Trump says Kim demanded 100% relief from international sanctions and was something he just couldn't do. There are no plans for a third meeting.
The South Korea Kospi was hit hardest and shed -1.76%. The index was in turn led by shares of stocks with North Korean exposure like Hyundai Elevator down -18%. Shares of Samsung and SK Hynix were hammered posting losses of -3.5% and -5.05% respectively. The Japanese Nikkei shed -0.79% on the news while the Australian ASX advanced 0.30%.
In China equities were down on weaker than expected manufacturing data. The mainland Shanghai and Hong Kong Hang Seng both moving lower by -0.45%. Manufacturing activity as measured by the Official PMI came in at a low 49.2 which is below expectations and the lowest level in three years. The slowdown is a combined effect of financial reforms and the ongoing US/China trade war.
Basic Resources Lead Markets In The EU
Basic resources were leading the EU market lower at midday on Thursday. The sector was down an average -2.0% on growing geopolitical tensions and uncertainty around the US/China trade deal. The Trump/Kim Summit along with border skirmishes between India and Pakistan have traders on edge. The UK FTSE was in the lead with a loss near -0.51% with the German DAX and French CAC posting much smaller losses, about -0.05%.
In stock news shares of Zolando shot to the top of the listing after the fashion retailer issued favorable guidance. the company says it expects to see solid growth this year and shares moved up 18%. French retailer Carrefour also moved higher after announcing plans to improve the balance sheet this year. It's shares gained 2.7% on the news. There was not meaningful economic data from the EU today.
U.S. GDP Is Better Than Expected
U.S. 4th quarter GDP came in at 2.6% according to data released today. Today's release counts for the 1st and 2nd estimates because the 1st estimate was delayed by the government shutdown. The data is 0.4% better than consensus estimates and boosted by several factors. Personal consumption, non-residential fixed income investment, exports, and inventory investment were all stronger than first thought. The data rounds out a solid year for the U.S. economy and reveals activity was not hurt by trade ties as much as feared.
The U.S. indices were indicated to open marginally lower before the GDP release and halved those losses in its wake. The tech-heavy NASDAQ Composite was in the lead with an indicated open near -0.30%. Today's action will be impacted by simmering negative geopolitical sentiment despite the solid read on GDP so traders should be cautious. Later in the morning, the Chicago Business Barometer (PMI) is due out.
This article was originally posted on FX Empire
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