قالب وردپرس درنا توس
Home / Business / US sanctions on Huawei sending stock reeling; the yield falls

US sanctions on Huawei sending stock reeling; the yield falls



By Saikat Chatterjee

LONDON (Reuters) ̵

1; European stocks fell, government bond yields fell and the Japanese yen strengthened on Thursday after the US government beat Chinese telecom giant Huawei with severe sanctions and further pressure on Chinese-American trade relations.

An index of European stocks fell as much as 0.5% in early European trading in the German stock index down 0.4%. US futures were 0.4%, pointing to a weak start on Wall Street.

The widespread weakness of European markets was somewhat offset by small gains in Chinese and Hong Kong indices, leading to only marginal losses on a global stock index as investors expected state governments to support the market and stabilize the sentiment.

"Chinese stocks are up as markets expect the authorities to intervene to support emotions, but this type of activity is not sustainable, and unless we see a clear solution in China -US trade conflict, the general feeling will remain weak," Neil Mellor, Senior CFO at BNY Mellon in London

While the benchmark indices in China and Hong Kong were up between 0.3-0.8% at the close of trading, bond markets were signaling more pain for risk willingness.

Core German government bond yields flirt with their lowest level for almost three years while Dutch bond yields were about to dip into negative territory, a phenomenon not seen since October 2016.

Late on Wednesday, the US Commerce Department said it was adding Huawei Technologies Co Ltd and 70 affiliates to its "Entity List" – a feature that prohibits the company from acquiring components and technology from US companies without government gsgodkjenning.

Moved surprised global markets as the mood had risen somewhat in the recent increase of news that US President Donald Trump was planning to delay auto import tariffs by a weak of weak US and Chinese economic data.

RATE CUT BETS GROW

As trading tensions have left on investors' radars, weak US data has also dropped market expectations of a US interest rate cut in the coming months.

In the US, sales sales fell unexpectedly in April, when households declined purchases of motor vehicles and a number of other goods, while industrial output fell 0.5% in April, the third drop this year.

Yelds on 10-year US government bonds eased to 2,366%, close to a 15-month low of 2,340% affected March 28.

Fed funds futures are full pricing in a price decline by the end of this year and more than a 50% chance of a move in September.

"The markets step by step for pricing in a price cut. There is a sea difference from a year ago when the consensus was three to four interest rate increases a year," said Akira Takei, fund manager at Asset Management One.

Falling US dividends have eroded support The US dollar dollar down 0.1 percent against a basket of its rivals

Oil prices outpaced the rise in the Middle East, beating global supplies despite an unexpected build in US commodity stocks

Brent crude rose 0.3% to $ 71.99 per barrel, while the US West Texas Intermediate (WTI) crude picked up $ 62.26, also half a percent higher.

Gold edged up to $ 1,296.9 per ounce.

For Reuters Live Markets blog in European and UK stock markets, please click: [19659021] (Reporting Saikat Chatterjee; Further Reporting of Hideyuki Sano and Daniel Leussink in TOKYO; Editing Andrew Cawthorne)


Source link