European stocks, dollar wobble before US-China trade talks

09:27 | 23/08/2018
Stock markets wobbled and the dollar was mixed against main rivals on Wednesday (Aug 22) awaiting the start of key trade talks between China and the United States.
european stocks dollar wobble before us china trade talks
European stocks, dollar wobble before US-China trade talks, AFP Photo / Andrew Burton / AFP

While not expecting a major deal when officials from Beijing and Washington meet, investors are hopeful they can start to find a way out of the months-long row that has seen tariffs imposed on billions of dollars of goods and stock markets tumble.

"Stock markets are mixed as trade talks still dominate the headlines," said market analyst David Madden at CMC Markets UK.

In Europe, both London and Paris closed higher, while Frankfurt ended essentially flat after having spent most of the day in the red.

On Wall Street, the Dow was lower while both the S&P 500 and tech-heavy Nasdaq Composite were higher in late morning trading.

After the S&P 500 set a new record high on Tuesday, Wall Street is set to reach Wednesday a new landmark on the longevity of the rising market that started in 2009 just after the global financial crisis.

The S&P 500 will mark 3,453 straight days without suffering a drop of 20 per cent from its peak. That makes it the longest "bull market," according to leading Wall Street statisticians.

Investors were also focused on US President Donald Trump's deepening legal troubles after his long-time personal lawyer Michael Cohen pleaded guilty on Tuesday to several charges, including illegally using campaign contributions to pay off a porn star and a Playboy model ahead of the 2016 election.

Cohen also said he had done so "at the direction of a candidate for federal office" and with the aim of influencing the election.

The claim could put Trump in legal jeopardy and raises the prospect that Cohen is about to open up to lawyers for the Russia investigation.

Also Tuesday, Trump's one-time campaign chairman Paul Manafort was convicted on eight counts, including bank fraud, tax fraud and a failure to declare foreign bank accounts.

However, Richard Harris, chief executive officer at Port Shelter Investment Management, said he thought Trump would ride out the storm.

"I don't think that what we saw... in terms of Manafort and Cohen are necessarily fatal to the president," he told Bloomberg TV.

"There are quite a lot of things that could continue and he could still ride them out. It takes an awful lot to impeach a president and it may take an awful lot for Trump not to be elected for a second term."

On currency markets meanwhile, the dollar continued to stutter after Trump's negative remarks about the Federal Reserve's interest rate rises.

The pound was one of the best performers against the greenback, breaking above US$1.29 for the first time in almost two weeks after top European Union negotiator Michel Barnier said officials would now work non-stop on Brexit talks, which are in their final stage.

Over in Frankfurt, shares in German auto parts giant Continental dropped more than 13 per cent on Wednesday after the group said annual profits would be slashed by falling sales and higher costs.

Shares in BMW, Daimler and Volkswagen also slid after Trump repeated a threat to impose a 25 per cent tariff on cars imported into the US from the EU.

Key figures around 1530 GMT:

New York - Dow Jones: DOWN 0.02 per cent at 25,816.81 points

London - FTSE 100: UP 0.1 per cent at 7,574.24 (close)

Frankfurt - DAX 30: UP 0.01 per cent at 12,385.70 (close)

Paris - CAC 40: UP 0.2 per cent at 5,420.61 (close)

EURO STOXX 50: UP 0.3 per cent at 3,421.79

Tokyo - Nikkei 225: UP 0.6 per cent at 22,362.55 (close)

Hong Kong - Hang Seng: UP 0.6 per cent at 27,927.58 (close)

Shanghai - Composite: DOWN 0.7 per cent at 2,714.61 (close)

Euro/dollar: UP at US$1.1597 from US$1.1569 at 2100 GMT

Pound/dollar: DOWN at US$1.2904 from US$1.2895

Dollar/yen: UP at 110.57 yen from 110.27 yen

Oil - Brent Crude: UP US$1.69 at US$74.32 per barrel

Oil - West Texas Intermediate: UP US$1.68 at US$67.52 per barrel


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