Stocks in Asia mixed as Hong Kong shares end lower after protests
Hong Kong’s Hang Seng index closed fractionally lower at 27,294.71 amid uncertainty, one day after violent clashes between protesters and riot police over a controversial extradition bill.
“You already have significant political risk premium embedded into Hong Kong equities because of the trade effects that are going on and Hong Kong is the gateway to China. So the outlook for China has taken a knock in the past month or so,” Binay Chandgothia, managing director and portfolio manager at Principal Global Investors, told CNBC’s “Squawk Box” on Thursday.
“Add to that the possibility that something wrong could happen in terms of the ongoing protests. Then you could see Hong Kong equities get cheaper,” Chandgothia said, adding that valuation levels in the Hong Kong markets are “fairly attractive” at present.
Mainland Chinese stocks were higher on the day, with the Shanghai composite up slightly to 2,910.74 and the Shenzhen component rising fractionally to 8,951.61. The Shenzhen composite also advanced 0.287% to 1,532.79.
Elsewhere, Japan’s Nikkei 225 slipped 0.46% to close at 21,032.00, as shares of Apple supplier Japan Display plummeted 11.94% after the company announced new restructuring plans, with the company’s president and CEO set to step down. The Topix index also declined 0.82% to finish its trading day at 1,541.50.
Over in South Korea, the Kospi shed 0.27% to close at 2,103.15 as shares of chipmaker SK Hynix dropped 3.35%. The ASX 200 ended its its trading day in Australia largely flat at 6,542.40.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.36%, as of 4:11 p.m. HK/SIN.
Asia-Pacific Market Indexes Chart
Wednesday’s declines stateside came following muted trading action in the previous session. The Dow closed marginally lower on Tuesday, ending a six-day winning streak.
Oil prices plunged on Wednesday following data that showed an unexpected increase in U.S. crude inventories for the second week in a row, against the backdrop of fears that fuel demand could weaken amid the U.S.-China trade fight.
U.S. West Texas Intermediate crude futures plunged $2.13 to $51.15 per barrel, tumbling 4% on the day to a new five-month low. Brent crude, the international benchmark for oil prices, fell $2.32 or 3.7%, at $59.97 a barrel, its first settle below $60 since January.
During Asian trading hours on Thursday afternoon, oil prices bounced from the previous day’s losses on reports of tanker explosions in the Gulf of Oman. U.S. crude futures jumped 2.44% to $52.39 per barrel, while Brent surged 2.62% to $61.54 per barrel.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.934 after rising from levels around 96.6 yesterday.
The Japanese yen changed hands at 108.31 against the dollar after touching levels above 108.5 earlier. while the Australian dollar traded at $0.6913 after slipping from the $0.696 handle yesterday.
— CNBC’s Fred Imbert and Tom DiChristopher contributed to this report.
European stocks close higher; Oil prices surge on Gulf of Oman tanker attack reports
The pan-European Stoxx 600 recovered from a 0.2% fall after the opening bell to climb 0.1% during the afternoon session. Basic Resources led gains with a 1.6% rise, while media stocks traded down around 0.7%.
European Markets: FTSE, GDAXI, FCHI, IBEX
International benchmark Brent crude traded at around $61.65 during afternoon deals, up 2.8%, while U.S. West Texas Intermediate (WTI) stood at $52.76, up 3.2%.
U.S. President Donald Trump struck a slightly more positive tone on the U.S.-China trade war Wednesday, but again threatened to increase tariffs on Chinese goods if no deal is agreed, deeming relations between the world’s two largest economies “testy” and doing little to assuage global trade fears.
In Asia, stocks mostly fell Thursday afternoon after a second straight day of declines on Wall Street. Hong Kong’s Hang Seng index closed 1.73% lower amid violent clashes between protesters and riot police over a controversial extradition bill.
Back in Europe, Luxembourg Prime Minister Xavier Bettel told CNBC’s Silvia Amaro on Thursday that there would be no renegotiation of the U.K.’s departure deal with the European Union. The reminder came as Conservative party candidates vying to replace Prime Minister Theresa May, each with their own lofty Brexit plan, faced a first vote among the party’s MPs.
Eurosceptic former Foreign Secretary Boris Johnson, who launched his campaign with a promise to take Britain out of the EU on October 31 with or without a deal, secured the most secret ballots with 114, while his successor Jeremy Hunt came a distant second with 43 votes.
The Swiss National Bank (SNB) stuck to its ultra-loose monetary policy on Thursday and blamed rising trade tensions between the United States and China for a spike in the safe-haven Swiss franc.
In corporate news, Germany raised 6.55 billion euros ($7.4 billion) in its auction of spectrum for 5G mobile services, the Federal Network Regulator (BNetzA) said after a contest lasting nearly three months that will see a fourth operator enter the market.
That fourth operator was German telecommunications provider 1&1 Drillisch, which saw its share price climb 5% in afternoon trade as investors reacted to the news. Shares of United Internet, 1&1 Drillisch’s parent company, also rose by 3.6%.
British plumbing company Ferguson topped the Stoxx 600 in afternoon deals, jumping 6.1% after activist fund Trian Fund Management announced it had built a 6% stake.
At the other end of Europe’s blue chip index, British copper producer Aurubis was down 7.5% after its CEO was dismissed early amid rising project costs.
Stocks rise, return to June's winning ways, as Disney shares outperform
The Dow Jones Industrial Average climbed 61 points as Disney shares outperformed. The S&P 500 gained 0.2%, led by the energy and consumer staples sectors. The Nasdaq Composite advanced 0.4%.
Disney shares contributed to the gains, rising 4% after an analyst at Morgan Stanley raised his price target on the stock to $160 per share from $135. The analyst cited the company’s new streaming service, noting it could give its global subscriber numbers a boost.
The Energy Select Sector SPDR Fund (XLE) jumped 1% as oil prices surged. Hess and Phillips 66 were among the best performers within the fund, rising more than 2% each.
The major indexes posted small losses in each of the previous two sessions as a rally to start off June took a pause. The major indexes were all up more than 4% for the month, however, after notching sharp losses in May.
Drew Angerer | Getty Images
Still, lingering trade tensions kept investors on edge. Expectations that trade officials from the U.S. and China will clinch a deal on the sidelines of a G-20 meeting in Osaka on June 28-29 have been fading in recent days.
President Donald Trump, who has said he still has plans to meet with Chinese President Xi Jinping later this month, has repeatedly threatened to escalate an already months-long trade war by putting tariffs on almost all of the remaining Chinese imports that are not already impacted by U.S. charges.
Oil prices, meanwhile, got a boost after two oil tankers were attacked in the Gulf of Oman. The Trump administration blamed the attacks on Iran. U.S. crude prices settled 2.2% higher at $52.22 per barrel. The jump comes a day after oil slipped to its lowest level in five months amid continued increases in U.S. crude stockpiles and concerns about lower demand growth.
“This will be the third time we manage to hold above that $50 level,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “I don’t think we’re ready to get back to $65 yet, because of softenss in the global economy, but I do think we can avoid dropping below $50. Look for oil to trade in a range between $50 and $55 over the next few weeks.”