Markets flat as investors await US tariff deadline
In Dublin, FBD shares tick up despite internal inquiry
Traders work on the floor of the New York Stock Exchange.
World stocks were flat on Wednesday amid growing anxiety ahead of Washington’s end of week deadline to impose tariffs on Chinese imports. The MSCI All-Country World index, which tracks shares in 47 countries, was lower by less than 0.1 per cent on the day, recovering slightly from a 0.2 per cent fall earlier.
Washington has said it would implement tariffs on $34 billion worth of Chinese imports on July 6th, and Beijing has promised to retaliate in kind on the same day. However, China’s finance ministry said it will “absolutely not” fire the first shot in a trade war with the United States and will not be the first to levy tariffs.
Concerns about the outbreak of a global trade war have, among other factors, prevented a sustained recovery in global stock markets since a violent sell-off knocked them off records highs in February.
The Iseq index closed marginally up at 6,975 after what was described as a quiet day’s trading in advance of the US deadline. Shares in FBD, which yo-yoed this week following news that its chief executive, Fiona Muldoon, was the subject of an internal inquiry, traded flat at €10.45. Ryanair, which has become embroiled in industrial action with pilots threatening planning a one-day strike next week, rose marginally to €15.60. Building materials group CRH, which has considerable operations in the US and is therefore exposed to a global trade war, was also up at €30.32.
PaddyPower Betfair was up five cent at €93. Drinks maker C&C traded up 2 per cent at €3.31 ahead of its annual general meeting in Dublin on Thursday. Packaging group Smurfit Kappa traded flat at €34.58.
Britain’s top share index lost some ground, weighed down by weakness among miners and energy stocks, though investors cheered Sainsbury’s trading update. The blue chip FTSE 100 index closed down 0.3 per cent at 7,569.31 points, slightly underperforming a roughly flat European market. A rise in the pound following better-than-expected UK services PMI data also weighed on FTSE constituents that rely on dollar earnings.
Mining stocks weighed on the British index, with Rio Tinto, BHP Billiton and Antofagasta between 2.3 and 2.7 per cent lower as underlying metals prices continued to struggle, hit by concerns over trade tensions between the United States and China. Likewise shares in big oil stocks BP and Royal Dutch Shell declined 0.2 and 0.5 per cent respectively.
Trading more broadly has been choppy before the Friday deadline on trade. Among standout gainers, supermarket Sainsbury’s, rose about 3 per cent after it gave an update on trading in its fiscal first quarter. Though sales growth slowed in its latest quarter, the 0.2 per cent rise in like-for-like retail sales was ahead of analysts’ average forecasts.
The pan-European STOXX 600 index was last down 0.1 per cent, see-sawing from positive to negative territory during the day. Germany’s exporter-heavy Dax fell half a per cent. A Chinese court temporarily banned Micron Technology from selling chips in China, the world’s biggest memory chip market, hitting shares in US stock overnight and Asian semiconductor stocks on Wednesday.
Europe’s tech sector fell 1.5 per cent led by falls in chipmakers STMicro and Infineon, which were down by nearly 8 per cent and 2.5 per cent respectively. “The biggest risks to the technology sector are regulation and global semiconductor disruption from an escalating trade war,” Peter Garnry, head of equity strategy at Saxo Bank, said. “At this point, the probabilities for both scenarios having major impacts on the technology sector in the short term are low,” Mr Garnry said.
US markets were closed on account of the US Independence Day holiday. – Additional reporting by Reuters