By Will Horner
Global stocks slipped Thursday amid political uncertainties in Europe and tensions in China over a protracted trade standoff with the U.S.
In Europe, the pan-continental Stoxx Europe 600 fell 0.8% in early trading, dragged lower by trade-sensitive automotive and technology stocks. The index's autos & parts and technology subindexes slipped 2.8% and 1.6%, respectively.
In Asia, markets were broadly lower, with Chinese equities falling furthest as investors sought to reduce their exposure to the county. The Shanghai Composite slipped 1.4%, while the smaller-cap Shenzhen Composite fell 2.4%. Hong Kong's Hang Seng traded 1.9% lower and Japan's Nikkei lost 0.3%.
The one exception was India's BSE Sensex index, which climbed 0.5%
after investors there cheered early results from the nation's elections which looked set to return Prime Minister Narendra Modi to power.
In the U.S., futures pointed to declines of 0.7% for the Dow Jones Industrial Average and S&P 500 and 1% for the Nasdaq-100.
The yield on 10-year U.S. Treasurys was also down Thursday at 2.377%, from 2.393% Wednesday. Yields and prices move in opposite directions.
Investors await the European Parliamentary elections that began in the U.K. and the Netherlands Thursday. Populist parties are predicted to perform well across Europe when continentwide results are announced Sunday.
That could make compromises between European Union governments less likely and embolden euroskeptics, said Jörg Krämer, chief economist at Commerzbank.
"After victory in the European elections the parties critical of the European Union will become even more self-confident," he said in a recent note. "This will cause nervousness in the market."
The British pound lost another 0.4% against the dollar as a last-ditch attempt by Prime Minister Theresa May to win support for her Brexit plan looked unlikely to succeed. The resignation Wednesday of Andrea Leadsom, the latest cabinet member to quit over Brexit, further hit sterling.
Uncertainty over the U.S.-China trade dispute--with no date yet set for further talks--was also making investors pessimistic about hopes for a resolution, analysts said.
Mixed messages on the issue made it hard for investors to settle on a likely outcome, said Geoffrey Yu, head of the U.K. Investment Office at UBS Wealth Management.
"Investors may have trouble focusing on too many narratives at once. Right now, tensions between the U.S. and its major trading partners continue to drive stock market volatility," Mr. Yu said.
Investors were also weighing the latest meeting minutes from the Federal Reserve, which reinforced the view that the central bank will leave interest rates unchanged for now. The meeting took place before the recent flare up in trade tensions.
The WSJ Dollar Index, which tracks the dollar against a basket of currencies, rose 0.1%.
In commodity markets, oil prices continued to slip after data Wednesday showed U.S. stockpiles rose. Brent crude fell 1% to $70.29 a barrel. Gold prices rose 0.1% to $1,275.15 an ounce.
(END) Dow Jones Newswires
May 23, 2019 04:49 ET (08:49 GMT)
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