2 Months : From Oct 2019 to Dec 2019
By Anna Isaac and Joanne Chiu
-- Hang Seng drops 1.8%
-- U.S. 10-year Treasury yield falls
-- U.S. stock futures slip
Global stocks moved lower Wednesday after stumbling blocks emerged in trade talks between the U.S. and China.
Major indexes across Asia fell, and continuing political unrest in Hong Kong drove the Hang Seng lower by 1.8%. Japan's Nikkei 225 was down 0.9%.
In Europe, the Stoxx Europe 600 dropped 0.4%, while other regional indexes also slipped. The FTSE 100 fell 0.3%, while Germany's DAX dropped 0.5%. U.S. stock futures slipped, with contracts tied to the Dow Jones Industrial Average down 0.3%.
A question hanging over trade talks is whether Washington will agree to remove existing tariffs on Chinese imports to secure an initial deal with Beijing, rather than just lifting the threat of further levies due Dec. 15.
"In the short term the market's been too optimistic. The best interpretation of the trade situation is that almost everything that can be tariffed has been tariffed," said Christopher Mahon, director of asset allocation research at Barings.
Trade concerns weighed on assets that are sensitive to global growth prospects. The benchmark for world oil prices, Brent crude, fell 0.7% Wednesday. Shares in auto makers and parts providers, which have been particularly exposed to trade tensions, fell 1.6% on the Stoxx Europe 600.
Meanwhile, havens rallied. Yields on sovereign bonds fell. The yield on the U.S. 10-year Treasury slipped to 1.883%, down from 1.909% Tuesday. Gold climbed 0.9%, and the Swiss franc was 0.3% stronger against the dollar.
Shares in Tech Data rose 4.4% in premarket U.S. trading after it agreed to be purchased by Apollo Global Management for $5.4 billion. Cloud-based data analytics company Datadog's shares rose 13% premarket after its earnings beat expectations. Skyworks Solutions, which makes semiconductors and operates in both the U.S. and China, fell 5% premarket after it said its revenue had fallen in the fourth quarter.
Technology giant Cisco Systems will report earnings later Wednesday.
Markets will get an update on price growth in the U.S. on Wednesday when the October consumer-price index is released by the Labor Department. Later, Federal Reserve Chairman Jerome Powell gives testimony to Congress's Joint Economic Committee. Lines of questioning for Mr. Powell might include the Fed's expected pause on interest-rate cuts and the overall health of the U.S. economy.
Separately, policy makers Neel Kashkari of the Minneapolis Fed and Thomas Barkin of the Richmond Fed are also set to deliver speeches.
Stocks fell in Hong Kong as unrest gripped the city, including parts of the financial district, for a third straight weekday.
"The escalation of violence has caused some market jitters," said Daryl Liew, head of portfolio management at REYL Singapore.
The Hang Seng's fall Wednesday put its losses this week to 3.9%. Insurer AIA Group led declines on the flagship index with a 3.2% fall. Selling financial products to mainland visitors in Hong Kong is an important line of business for AIA. Elsewhere, real-estate firm Sun Hung Kai Properties shed 2.4%.
Mr. Liew said global shares were richly valued and uncertainties over global growth and the trade talks could dent investors' risk appetite.
In Europe, banks were the worst performing sector in the Stoxx Europe 600, down 2.4%. The drop was led by Spanish banks, after the leading socialist party, Podemos, moved toward forming a new government coalition.
Podemos has pledged to raise taxes on banks and block privatizing Bankia SA's, one of the country's largest lenders. Its shares fell 5%. Banco Santander SA dropped 4.2%.
Write to Anna Isaac at firstname.lastname@example.org and Joanne Chiu at email@example.com
(END) Dow Jones Newswires
November 13, 2019 08:44 ET (13:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.