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Mar 7, 2018

Asia, Europe and U.S. Stock Markets Report on March 7, 2018.


Gary Cohn, metals tariffs and currencies in focus

Cheang Ming

Asian markets closed lower in choppy Wednesday trade following news that a top Trump economic advisor had resigned.
The Nikkei 225 slipped 0.77 percent, or 165.04 points, to close at 21,252.72. The index had pared losses of around 1 percent earlier in the day to hover around the flat line, before sliding once again.
The iron and steel sector, which would likely be affected if recently announced tariffs were implemented by the Trump administration, fell by 2.12 percent.
South Korea's Kospi shed 0.4 percent to close at 2,401.82 after notching gains earlier in the day. Despite the broader sentiment in the market, heavyweight Samsung Electronics advanced 3.4 percent and SK Hynix edged up 0.36 percent.

-165.04 -0.77%
HSI HSI 30196.92
-313.81 -1.03%
ASX 200 S&P/ASX 200 5902.00
-60.40 -1.01%
SHANGHAI Shanghai 3271.46
-18.18 -0.55%
KOSPI KOSPI Index 2401.82
-9.59 -0.40%
CNBC 100 CNBC 100 ASIA IDX 8700.24
-62.61 -0.71%
Overnight news that North Korea was open to talks with the U.S. on denuclearization was also in focus as stocks with exposure to North Korea jumped. Shinwon, which Reuters said formerly managed factories in the Kaesong industrialized zone, surged 21.81 percent.
The Hang Seng Index lost 1.15 percent by 3:00 p.m. HK/SIN, but held above the 30,000 mark. Mainland markets closed mixed: The Shanghai composite edged down 0.55 percent to end at 3,271.46 and the Shenzhen composite traded lower by 0.78 percent.
Down Under, the S&P/ASX 200 declined 1.01 percent to end at 5,902. All of the benchmark's sub-indexes finished the day in the red, with the exception of gold producer stocks, which rose 1.49 percent. The heavily weighted financials sub-index lost 1.13 percent as Australia's "Big Four" banking stocks edged down.

Trade concerns back in focus

Trade fears, which had eased slightly in recent sessions, were in focus after White House chief economic advisor Gary Cohn resigned from the Trump administration on Tuesday.
While Cohn's departure date has not been announced, the development came after Trump's announcement last week that tariffs of 25 percent and 10 percent would be implemented on steel and aluminum imports, respectively. Cohn, a free trade advocate, had been against the tariffs.
The dollar slid against the safe-haven yen on the news, fetching 105.54 at 2:40 p.m. HK/SIN, after falling as low as 105.43 earlier and compared to the 106.1 handle seen at the end of the New York session.
Against the Swiss franc, which is also seen as a safe haven currency, the greenback declined to trade at $0.9365, compared to levels around the $0.94 handle seen in the last session. The dollar index, which tracks the U.S. currency against a basket of six rivals, slipped around 0.2 percent to 89.425.
The SPDR S&P 500 ETF Trust also fell 1.5 percent while U.S. stock index futures traded lower. Dow Jones industrial average futures were down 419 points during Asia afternoon trade.
Following Trump's threat that European Union car taxes could be taxed after the bloc said it would not sit idly by U.S. tariffs, one expert cautioned that tensions could continue to simmer.
"It won't end there. It is not hard to characterize current market behavior as complacent," wrote ING Chief Economist Robert Carnell in a note.
In corporate news, Japan's Kobe Steel on Tuesday said CEO Hiroya Kawasaki would resign on April 1 following a data falsification scandal. Shares of Kobe Steel were down 7.39 percent, under-performing the broader index.
Despite the broader declines seen in greater China markets, banking stocks listed on the mainland got a boost after Reuters reported on Tuesday that regulators intended to cut the proportion of funds required to cover bad debt. China Construction Bank finished the day up 1.85 percent and Industrial and Commercial Bank of China advanced 1.37 percent.
On the commodities front, oil prices moved in the same direction as stocks. U.S. crude futures lost 0.86 percent to trade at $62.06 per barrel and Brent crude futures were down 0.85 percent at $65.23.


European stocks close higher after EU threatens US with tariffs

Justina Crabtree, Sam Meredith, Ryan Browne

European stocks closed provisionally slightly higher Wednesday, after the resignation of President Donald Trump's economic advisor and the European Union's threat of tariffs on U.S. goods heightened fears of a global trade war.

FTSE FTSE 7158.21
11.46 0.16% 623219295
DAX DAX 12244.79
130.92 1.08% 72705545
CAC CAC 5190.06
19.83 0.38% 61432012
IBEX 35 --- ---
--- --- ---
The pan-European Stoxx 600 closed provisionally 0.37 percent higher Wednesday, with most sectors and major bourses in positive territory.
Europe's auto stocks were among the best performers, up 0.4 percent. Renault shot up by 8 percent after Reuters reported that it was in talks with Nissan to sell most of the French government's stake in the car-maker to its Japanese alliance partner. The stock later pared those gains as traders pointed to a denial of the plans by Nissan. The auto sector was rattled recently after Trump threatened a levy on imports of European cars.
Basic resources, meanwhile, were down more than 0.3 percent, amid concerns the Trump administration will proceed with protectionist tariffs on steel and aluminum imports. Fresnillo, Randgold Resources and Hydro were the worst performers of the sector.
Looking at individual stocks, Rolls-Royce surged to the top of the European benchmark after the firm said it remained on course to meet its financial goals for 2020. The British engine-maker reported better-than-expected operating profit for 2017, sending shares more than 11 percent higher.

Cohn resigns

On Wall Street, stocks traded lower on the back of Gary Cohn's resignation from the White House.
Cohn, Trump's top economic advisor and the former president of Goldman Sachs, announced Tuesday that he would resign following disagreement with Trump over plans to slap tariffs on steel and aluminum imports. Cohn was seen as a voice of reason in the White House and well-liked by Wall Street.
The European Union outlined a three-pronged response to proposed metals tariffs from Trump's administration Wednesday, including items such as peanut butter, cranberries and orange juice that could see higher charges in Europe.
Speaking at a press conference in Brussels, Cecilia Malmstrom, the EU's commissioner for trade, said the institution would take the case to the World Trade Organization and would coordinate its actions with other trade partners that are also against the proposed tariffs from the U.S.
In the U.K., Saudi Crown Prince Mohammed bin Salman is to begin a three-day state visit to London. He will meet U.K. Prime Minister Theresa May, Foreign Secretary Boris Johnson and senior royals at Windsor Castle. Protests against his visit are planned.
Meanwhile, a political stalemate continues in Italy as parties vie for the leadership of a governing coalition after Sunday's inconclusive election. The leader of Italy's far-right Lega – the largest party within a center-right coalition in last week's vote – has said that he is the only option for prime minister. Former Prime Minister Silvio Berlusconi has put his name forward as the "coordinator of the center-right" coalition, according to Reuters.
CNBC's Silvia Amaro contributed to this report.+


Dow briefly erased 2018 gains to go negative with more than 300-point tumble amid Cohn resignation

Mark DeCambre

The Dow Jones Industrial Average on Wednesday afternoon briefly gave up its year-to-date gains, as Wall Street wrestled with news that Cohn is National Economic Council Director Gary Cohn has resigned from the White House. Market participants fear that Cohn's departure suggests that President Donald Trump will push forward on tariffs and on steel and aluminum imports that the key adviser has opposed. Moreover, Cohn was viewed as a chief engineer of the president's pro-business agenda. The Dow DJIA, -0.33% was down 349 points, or 1.4%, at 24,535 at its lows, pushing the average down 0.7% in the first three months of the year. Most recently, the Dow was off 71 points, or 0.3%, at 24,813, off its worst levels of the day. Meanwhile, the S&P 500 index SPX, -0.05% was down flat at 2,726, hanging on to a 2% year-to-date return, while the Nasdaq Composite Index COMP, +0.33% was up 0.3% at 7,394, maintaining a 2018 rise of 7.1%. U.S. stocks fell to session lows as the energy sector XLE, -0.78% took a sharp turn lower at around noon. Corrections and Clarifications: An earlier version of this article misstated Gary Cohn's title. His official role at the White House is National Economic Council Director.

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