business
Wednesday Aug 03 2022
By
AFP

Stock markets rise but Taiwan fears keep confidence in check

By
AFP
A board displays a chart at a stock exchange. — AFP
A board displays a chart at a stock exchange. — AFP

  • Most equity markets edged upwards on Wednesday.
  • Oil prices slid as OPEC+ group of major oil exporters convened to discuss output strategy.
  • “There has been a lot of fear but no material effect,” AvaTrade analyst Naeem Aslam says. 


LONDON: Global stocks mostly rose Wednesday as traders tracked House Speaker Nancy Pelosi’s visit to Taiwan, which has further strained China-US ties.

The highest profile trip to Taiwan in 25 years by a US politician met with condemnation from Beijing, which warned of serious economic and military consequences.

The news had sent shivers on Tuesday through trading floors that were already on edge over the Ukraine war, surging inflation, rising interest rates and slowing economic growth.

However, most equity markets edged upwards on Wednesday.

London nudged higher on the eve of a widely-expected half-point interest rate hike in Britain.

Oil prices slid as the OPEC+ group of major oil exporters convened to discuss output strategy.

Meanwhile, Pelosi departed Taiwan on Wednesday evening, ending her controversial landmark visit that Beijing responded to with threats and military drills.

Equities hold gains

“There has been a lot of fear but no material effect,” AvaTrade analyst Naeem Aslam told AFP, when questioned about the markets impact of Pelosi’s visit.

“Hence, we see equities holding on to their gains and moving higher.”

Analysts are also keen to find out what the White House’s response will be, particularly ahead of mid-term elections in November with anti-China rhetoric playing well with voters, but President Joe Biden keen not to further harm economic ties.

SPI Asset Management’s Stephen Innes added that the US administration was probably not likely to cut Trump-era tariffs before then.

Wednesday’s broadly positive performance followed a drop on Wall Street, where the Taiwan news was compounded by a series of hawkish comments from Federal Reserve officials indicating more big interest rate hikes could still be in the pipeline.

Stocks rallied last week and Treasury yields dropped after boss Jerome Powell hinted the bank could begin slowing down, but the latest remarks suggest a hoped-for dovish pivot might not be coming just yet as inflation remains stubbornly high.

Key figures at around 1030 GMT

London - FTSE 100: UP 0.1% at 7,413.24 points

Frankfurt - DAX: UP 0.2% at 13,478.84

Paris - CAC 40: UP 0.2 at 6,421.76

EURO STOXX 50: UP 0.4% at 3,699.33

Tokyo - Nikkei 225: UP 0.5% at 27,741.90 (close)

Hong Kong - Hang Seng Index: UP 0.4% at 19,767.09 (close)

Shanghai - Composite: DOWN 0.7% at 3,163.67 (close)

Taipei - TAIEX: DOWN 0.2% at 14,777.02 (close)

New York - Dow: DOWN 1.2% at 32,396.17 (close)

Dollar/yen: DOWN at 133.04 yen from 133.10 yen Tuesday

Euro/dollar: UP at $1.0196 from $1.0166

Pound/dollar: UP at $1.2185 from $1.2170

Euro/pound: UP at 83.68 pence from 83.57 pence

Brent North Sea crude: DOWN 0.9% at $99.62 per barrel

West Texas Intermediate: DOWN 0.6% at $93.88 per barrel