Stocks Fall as Hong Kong Unrest Fuels Investor Concerns
13 August 2019 - 11:49AM
Dow Jones News
By Anna Isaac and Steven Russolillo
-- Hong Kong's benchmark stock index shed 2%
-- Stocks in Europe dropped, led by banks and autos
-- Gold rose 1% while U.S. Treasury yields slipped
Stocks dropped across the world as protests in Hong Kong, a
political shake-up in Argentina and global trade tensions continued
to fuel investors' concerns about the global economy.
This week's selloff in Hong Kong stocks accelerated, with the
Hang Seng Index falling 2.1% Tuesday amid continued unrest. The
gauge -- which has lost 11% since the beginning of July, when the
protests turned more violent -- joined Korea's Kospi as the second
major world benchmark in negative territory this year.
Separately, Cathay Pacific shares fell another 3% after
declining 4.9% on Monday, their steepest drop in three years. They
slid after the Hong Kong airline threatened to fire staff for
supporting the protests.
In Europe, the benchmark Europe Stoxx 600 index declined 0.4%,
led lower by banks and auto companies. German consumer-goods
company Henkel was among the worst performers, dropping 6.8% after
it cut its full-year growth forecast.
Futures tied to the Dow Jones Industrial Average were largely
flat, following the index's sharp drop Monday. The Argentine peso,
which fell more than 30% briefly Monday amid political upheaval in
the Latin American country, was largely flat against the U.S.
dollar.
Yields on European government bonds ticked lower across the
board, a reflection of investor nerves over the economic outlook.
The German benchmark 10-year bund yield fell to minus 0.610%, while
the U.K. 10-year gilt rate slipped to 0.467%. Bond yields fall as
prices rise.
"Yields are likely to say low for a while," said Oliver Jones,
market economist at Capital Economics. While short-term factors
such as the protests and political shifts are clearly having an
impact on investor sentiment, the long-term outlook determining
bond prices is "a slowing global economy and a trade war which
continues to run," he said.
Gold, a traditional haven commodity, rose 1.2%, while the yields
on U.S. 10-year Treasurys dipped to as low as 1.62% from Monday's
1.64% before edging back up.
Investors have been caught out by the worsening trade tensions,
said Fahad Kamal, chief market strategist at Kleinwort Hambros,
Société Générale's U.K. private bank.
"The market sentiment a few months ago was for trade-war
resolution by the end of the year," he said. "Now they face a
downside surprise."
Later in the day, investors will pay close attention to the
Labor Department's July consumer-price index for signs of
strengthening inflation, to gauge what impact it may have on the
Federal Reserve's interest-rate decisions. In the previous month,
core prices rose 0.1%.
Weakening price pressure was one of the factors behind the Fed's
decision to cut its benchmark rate last month.
Shares in Reliance Industries rose 12% after Saudi Arabia's
state oil company, Aramco, agreed to buy a 20% stake in the Indian
company's oil-and-chemicals business.
Write to Steven Russolillo at steven.russolillo@wsj.com
(END) Dow Jones Newswires
August 13, 2019 05:34 ET (09:34 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Cathay Pacific Airways (PK) (USOTC:CPCAY)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Cathay Pacific Airways (PK) (USOTC:CPCAY)
Historical Stock Chart
Von Jul 2023 bis Jul 2024