On 11 April, 2017 – Most global stock indices retreated

Geopolitical concerns in the Middle East and Asia sent investors to the sidelines.
United States
US stock indices were lower Tuesday but closed off their worst levels. The Dow Jones industrials were down 6.72 points, the S&P down 0.1 percent and the Nasdaq 0.2 percent lower. U.S. stocks eased Tuesday afternoon as mounting geopolitical tensions drove investors out of riskier assets. Investors were jittery but the sentiment eased in late afternoon trading. Investors are awaiting the start of the corporate earnings reporting season that begins on Thursday. Worries about the situation with Syria and North Korea continued to fester.
United Continental dropped after a worldwide backlash erupted against the carrier over a passenger who was removed off one of its overbooked US flights. Loews Corp agreed on Tuesday to acquire Consolidated Container from US private equity group Bain Capital for about $1.2 billion. Morgan Stanley and Bank of America were both lower. Apple retreated amid fears that it is planning to replace chips from a key supplier Dialog Semiconductor. Other tech stocks including Intel, Micron Technologies, Qualcomm and Texas Instruments also declined.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$2.85 to US$1,252.90. Copper futures were up 0.2 percent to US$2.61. WTI spot crude was up 14 US cents to US$53.22. Dated Brent spot crude was up 8 US cents to US$56.06. The US dollar was up against the Australian dollar and was virtually unchanged against the Canadian dollar. The currency was down against the yen, euro, pound and Swiss. The Dollar Index was down 0.3 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 6 basis points to 2.93 percent and 2.30 percent respectively.
Europe
European markets were mostly lower after fluctuating between small gains and losses during the trading day. The FTSE and SMI were up 0.2 percent and 0.3 percent respectively. The CAC and DAX declined 0.1 percent and 0.5 percent.
Luxury goods companies rallied after a strong quarterly report from France’s LVMH. Gold stocks also fared well as gold prices climbed on its safe haven appeal. Investors continued to turn more risk averse investments because of concerns over both North Korea and Syria.
Dialog Semiconductor tumbled on a brokerage downgrade after reports that Apple could move business away from the firm. LVMH advanced after its first-quarter sales surged 15 percent boosted by strong sales across the company’s empire of luxury brands. Burberry was higher as well. BHP Billiton slipped after it rejected calls from activist shareholder Elliott Advisors to be broken up and end its dual-listing. JD Sports jumped after reporting a more than 80 percent gain in annual pre-tax profit.
Gold Miner Randgold Resources and Fresnillo were higher as gold prices climbed higher on safe-haven demand. Tesco gained after a court approved a deal between the company and the Serious Fraud Office (SFO) to settle a long running investigation over an accounting scandal. Givaudan, a manufacturer of fragrance and flavor products, climbed in Zurich after its first-quarter sales beat estimates. Banco Popular retreated in Madrid after the lender unveiled capital raising plans. Lufthansa gained on a broker upgrade. International Consolidated Air and EasyJet also advanced.
February Eurozone industrial production declined unexpectedly after rebounding in the previous month. Output dropped a monthly 0.3 percent, reversing a downwardly revised 0.3 percent rise in January. April German investor confidence rose for a second straight month to its highest level in more than one-and-a-half years. The economic sentiment indicator climbed to 19.5 from 12.8 in March. UK consumer price index was up 2.3 percent in March. An airfare caused by the timing of Easter was offset by higher food prices.
Asia Pacific
Asian shares were mostly lower Tuesday thanks to rising geopolitical tensions in the Middle East and the Korean peninsula along with uncertainty over the French election.
However, the Shanghai Composite reversed earlier losses and was up 0.6 percent to hit 15-month highs after Beijing’s announcement on Saturday that it plans to build Xiongan New Area. The new area will be modeled after the Shenzhen special economic zone next to Hong Kong that helped start China’s economic reforms in 1980. The Hang Seng retreated 0.7 percent.
Both the Nikkei and Topix were down 0.3 percent — a stronger yen amid rising geopolitical tensions put pressure on exporters. Toshiba tumbled on a Nikkei report that the company may file its twice-delayed financial results for the nine-month period today without the auditor’s approval. Bank of Japan Governor Haruhiko Kuroda in his quarterly report said the BoJ will continue with its massive stimulus until inflation moves near the 2 percent target.
Both the S&P/ASX and All Ordinaries were up 0.3 percent. The big four banks advanced. Woodside Petroleum and Oil Search were higher as crude oil futures climbed to a five-week high amid geopolitical uncertainty in Syria and another shutdown at Libya’s largest oilfield over the weekend. BHP Billiton declined after it rejected calls from an activist shareholder to be broken up and end its dual-listing. Australia’s business confidence strengthened to the highest level since global financial crisis according to the survey results from the National Australia Bank. The business conditions index rose by 5 points to 14 in March, the highest since 2008.
The Kospi closed at its lowest levels in nearly four weeks as foreign investors kept selling for the seventh straight day on concerns that North Korea could conduct another missile or nuclear test within days. The Kospi was down 0.4 percent. The Sensex however added 0.7 percent.
Looking Forward
China releases March consumer and producer price indices. India posts March CPI and February industrial production. The UK reports March labour market data. The Bank of Canada announces its monetary policy and issues its Monetary Policy Report. In the US, March import and export prices indices will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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