By Avantika Chilkoti 

Global stocks wavered Wednesday as concerns around global growth weighed on investor sentiment and an impasse in the U.K. on a Brexit deal rippled across European markets.

The Stoxx Europe 600 was up 0.2% in morning trading. U.S. futures pointed to an opening loss of 0.3% for the Dow Jones Industrial Average and a gain of 0.2% for the S&P 500.

Asian stocks were mostly lower, with the Shanghai Stock Exchange down 1.1%, Hong Kong's Hang Seng Index dipping 0.4% and Japan's Nikkei dropping 1%.

In Europe, investors were digesting news from London overnight, where British lawmakers rejected a Brexit deal. The U.K.'s parliament is now set to vote Wednesday on whether a hard Brexit, in which the country barrels out of the EU without an agreement at the end of March, must be avoided.

The British pound was up 0.6% versus the dollar and 0.5% on the euro Wednesday, following a 1% drop Tuesday after the U.K.'s attorney general said Prime Minister Theresa May's revised Brexit deal didn't eliminate the risk that the U.K. would be stuck in a customs union with the bloc.

The U.K.'s FTSE 100, which is dominated by large international businesses, was broadly flat and its FTSE 250, was down 0.1%.

"The stakes are getting higher and higher, so any bit of good or bad news is going to cause swings in the market," said Brian Hilliard, chief U.K. economist at Société Générale.

For many investors the major concern is the political uncertainty around a prolonged negotiation, which is weighing on consumer sentiment and has businesses putting investment on hold.

"A delay here is probably the worst thing that can happen because it just increases the period of uncertainty," said Aaron Anderson, senior vice president of research at Fisher Investments. "Investors don't give the economy enough credit for being adaptive."

Economists have flagged concerns that the impact of a hard Brexit on the wider region have been underestimated, with the focus on the economic fallout for the U.K. itself.

Investors have been on edge this week after European Central Bank President Mario Draghi announced major cuts to growth and inflation forecasts for the eurozone, following a slew of weak economic data and ongoing trade tensions that weigh particularly on the region's open economy.

"The questions surrounding China, the strength of the economy, the Chinese trade wars and Brexit all combined is particularly sensitive for Europe," said David Slater, a portfolio manager at Trium Capital, the London hedge fund.

The yield on 10-year German government bonds rose to 0.069% Wednesday, having edged toward negative territory in recent sessions as the gloomy growth outlook in the region pushed European investors toward haven assets.

Meanwhile, concerns around growth in the U.S. continued after new inflation data published Tuesday came in weaker than expected, adding to disappointing payroll data last week.

"So many records being set with respect to our Economy [sic]," President Trump said on Twitter, labeling the economic improvement a "beautiful thing to watch."

The WSJ Dollar Index, which tracks the greenback against a basket of 16 currencies, was broadly flat Wednesday.

The 10-year U.S. Treasury edged up to 2.621% from 2.605% Tuesday. Yields move inversely to prices.

In commodities, global benchmark Brent crude oil was up 0.6% at $67.08 a barrel.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

 

(END) Dow Jones Newswires

March 13, 2019 07:45 ET (11:45 GMT)

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