Global stocks weighed down by concerns over trade, Italian budget
By David Randall NEW YORK (Reuters) - Mixed trading in benchmark U.S. indexes was not enough to turn global stock markets higher Tuesday as concerns about Italy's budget and the fate of U.S.-China trade talks continued to weigh on investor sentiment, pushing safe haven U.S.
By David Randall
NEW YORK (Reuters) - Mixed trading in benchmark U.S. indexes was not enough to turn global stock markets higher Tuesday as concerns about Italy's budget and the fate of U.S.-China trade talks continued to weigh on investor sentiment, pushing safe haven U.S. Treasury yields to their lowest levels since October 2017.
Markets had been cheered by limited gains for nationalists in the EU elections, though wins for euroskeptic parties in Italy, France, Poland and would-be ex-member Britain, as well as snap elections in Greece and political turmoil in Austria, curbed risk appetite.
Italy's dispute with the European Commission, however, emerged to dominate European trading as markets opened. The commission could fine Italy 3 billion euros for accumulating debt and deficits that break EU rules, Italian Deputy Prime Minister Matteo Salvini said on Tuesday.
"It reopens the whole agenda of whether Salvini wants to be part of the euro or not," said Colin Harte, portfolio manager and strategist at BNP Paribas Asset Management.
"The danger is that the (dispute between Salvini and the EU) turns out to be more aggressive on both sides, then you will see people switch out of positions," Harte said.
In the United States, the Dow Jones Industrial Average fell 22.18 points, or 0.09%, to 25,563.51, the S&P 500 lost 2.66 points, or 0.09%, to 2,823.4 and the Nasdaq Composite added 17.51 points, or 0.23%, to 7,654.51.
The pan-European STOXX 600 index lost 0.22% and MSCI's gauge of stocks across the globe shed 0.09%.
High-grade euro zone bond yields were lower across the board in a risk-off environment, with the ousting of Austrian Chancellor Sebastian Kurz adding to nervousness.
U.S. yields were also lower. Benchmark 10-year Treasury notes yielded 2.26%, down six basis points. The U.S. Treasury Department sold five-year government notes on Tuesday at a yield of 2.065%, the lowest yield for 5-year Treasuries since October 2017.
Trade worries remained high. U.S. President Donald Trump said on Monday that Washington was not ready to make a deal with China, but that he expected one in the future. At the same time, he pressed Japanese Prime Minister Shinzo Abe to reduce Japan's trade imbalance with the United States.
Hope for a U.S.-China trade agreement still underpins optimism in global markets.
"Markets are holding their nerve and will start to attach great hope to the meeting between Presidents Xi and Trump in June," said BNP Paribas' Harte. "But I'm not as convinced that Trump wants a deal.
"The big risk is that the U.S. starts being disruptive to supply chains ... and the big problem is we don't really understand how much damage this will do."
Auto stocks rose globally after Fiat Chrysler confirmed it had proposed a merger with Renault, a deal that would create the world's third-biggest carmaker. The rally spilled into Asia with Mitsubishi Motors Corp 7211.T in Japan adding 5.95% and Nissan Motor Co 7201.T gaining 2.31%.
The dollar index, which tracks the U.S. currency against a basket of six other major currencies, rose 0.17% higher at 97.782.
In commodity markets, oil prices extended gains after rising more than 1% on Monday. Prices rose on tensions in the Middle East and continuing Russian supply disruptions after a contamination problem discovered last month.
Brent crude was 0.31% higher at $70.33 per barrel, having earlier dipped below the $70 mark. U.S. West Texas Intermediate crude gained 1.16% to $59.31 per barrel.
(GRAPHIC-Global assets in 2019 link: http://tmsnrt.rs/2jvdmXl).
(GRAPHIC-Global currencies vs. dollar link: http://tmsnrt.rs/2egbfVh).
(GRAPHIC-Emerging markets in 2019 link: http://tmsnrt.rs/2ihRugV).
(GRAPHIC-MSCI All Country Wolrd Index Market Cap link: http://tmsnrt.rs/2EmTD6j).
(Reporting by David Randall; Editing by Dan Grebler and Tom Brown)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.