Home Market Global markets still wavering amid geopolitical tensions

Global markets still wavering amid geopolitical tensions


Global equity markets are still facing uncertainty as fears over geopolitical issues continue to make investors nervous, while the latest European economic data has proved disappointing for some.

Overnight, Asian markets dipped as fears over a potential US-China trade war continued, despite signs that both countries may reach an agreement. Japans Nikkei indexd dropped 0.33 per cent, while the Tokyo Topix was down 0.02 per cent. Hong Kongs Hang Seng declined 0.31 per cent.

In Europe this morning, the FTSE dropped sharply after opening, before rallying nearly 10 points. Despite some positive results for the German economy in this mornings IHS Markit Flash PMI, the survey showed Germany's manufacturing had hit a nine-month low, and the countrys DAX index dropped almost 70 points after opening.

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This follows a poor performance by US stocks, which all closed lower on Friday. The tech-heavy Nasdaq tumbled 1.27 per cent, while the S&P 500 and Dow Jones fell by 0.85 per cent and 0.82 per cent respectively.

According to Rebecca OKeeffe, head of investment at Interactive Investor, the wavering in global markets is a product of continuing geopolitical uncertainty.

"Trade tariffs, US sanctions and technology are all having a push and pull effect on equity markets,” she said.

“Despite some optimism that the US and China will reach a truce on trade tariffs, investors are not putting out the bunting yet, as discussions between the worlds two largest economies are likely to be protracted and the negotiation style of President Trump provocative.”

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However, Jasper Lawler, head of research at London Capital Group says there are positive signs amid the chaos that may reassure investors in the week to come.

“North Korea agreeing to suspend missile testing and closing a nuclear site has lifted sentiment, as the US North Korea summit looms,” said Lawler. “After weeks of pressing geopolitical issues taking centre stage, investors are starting to return their gaze to stock performance and central bank action.”


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