World stocks mixed as China hits at looming US tariffs
A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, Sept. 12, 2018. Asian shares fell on Wednesday as China delayed issuing licenses to American businesses hoping to operate in the country, as the threat of more trade tariffs from Washington loomed. (AP Photo/Ahn Young-joon)
World markets were mixed on Wednesday as China delayed issuing licenses to American businesses hoping to operate in the country ahead of expected trade tariffs from Washington.
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European indexes mostly rose after a downbeat Asian session. British treasury chief Philip Hammond's comments that a divorce deal with the European Union could be reached by November boosted confidence.
KEEPING SCORE: In Europe, France's CAC 40 gained 0.9 percent at 5,330.62, while Britain's FTSE 100 was less than 0.1 percent lower at 7,269.97. Germany's DAX added 0.6 percent to 12,043.37. Wall Street was poised to open higher. Dow futures gained 0.2 percent to 26,054.00. S&P 500 futures rose 0.2 percent to 2,894.30.
ASIA'S DAY: Japan's benchmark Nikkei 225 lost 0.3 percent to 22,604.61, and the Kospi in South Korea was almost flat at 2,282.92. Hong Kong's Hang Seng index was 0.3 percent lower at 26,345.04. The Shanghai Composite index fell 0.3 percent to 2,656.11. Australia's S&P/ASX 200 shed 0.1 percent to 6,175.90.
BREXIT DEAL: Britain's Treasury chief Philip Hammond said Tuesday that striking a divorce deal with the European Union over the next two months was "doable." Hammond told a House of Lords committee that he agreed with the EU's chief negotiator, Michel Barnier, that a deal was possible in six to eight weeks if both sides are realistic. Business groups and civil servants say a "no-deal" Brexit could cause disruption in shipping, barriers to trade with the bloc, a fall in the value of the pound and even shortages of essential goods. Separately, official figures showed that household incomes in the U.K. picked up during the summer, a development that, if sustained, should shore up the British economy in the run-up to Brexit. The Office for National Statistics said Tuesday that average earnings excluding bonuses were up 2.9 percent over the three months through July from the same period the year before. In the three months to June, they were up 2.7 percent.
CHINA-U.S. TENSIONS: China is putting off accepting license applications from American companies in financial services and other industries until Washington makes progress toward a settlement, an official of a business group said Tuesday. The disclosure is the first public confirmation of U.S. companies' fears that their operations in China or access to its markets might be disrupted by the battle over Beijing's technology policy. The license delay applies to industries Beijing has promised to open to foreign competitors, according to Jacob Parker, vice president for China operations of the U.S.-China Business Council. The group represents some 200 American companies that do business with China. China is running out of American imports for penalties in response to President Donald Trump's tariff hikes, which has prompted worries that Chinese regulators might target operations of U.S. companies. The U.S. is poised to slap tariffs on $200 billion in Chinese goods and Trump has said he is considering tariffs on $267 billion more, or essentially every good that's imported from China.
ANALYST'S TAKE: "China's ability to respond is limited in tariffs, the government is using what they call 'qualitative measures,'" said Robert Carnell, head of research and chief economist at ING Bank. "You can't put a number on that, but it's not an idle threat. They could really make it hard for U.S. companies to operate in China."
ENERGY: Benchmark U.S. crude added 34 cents to $69.59 a barrel, after surging past $70 in the Asian session. The contract gained 2.5 percent to $69.25 per barrel in New York. The approach of Hurricane Florence and its potential to disrupt oil supply on the East Coast spurred gains. The U.S. is also getting ready to put sanctions on Iran's energy industry. Brent crude, used to price international oils, dropped 9 cents to $78.97 a barrel. It jumped 2.2 percent to $79.06 a barrel in London on Tuesday.
CURRENCIES: The dollar fell to 111.48 yen from 111.59. The euro was flat at $1.1586.
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