LONDON: Stock markets wobbled and the dollar was mixed against main rivals Wednesday awaiting the start of key trade talks between China and the United States.
While not expecting a major deal when officials from Beijing and Washington meet, investors are hopeful they can start to find a way out of the months-long row that has seen tariffs imposed on billions of dollars of goods and stock markets tumble.
Recent comments from US Commerce Secretary Wilbur Ross, signalling plans to delay a final decision on whether to impose duties on auto imports, have also provided some cheer.
“Investor focus remains inevitably on the trade story with talks due to begin later today between the US and China ahead of the start of tomorrow’s $16 billion of extra tariffs on a range of Chinese goods,” noted Michael Hewson, chief market analyst at CMC Markets UK.
However investors also focused on US President Donald Trump’s deepening legal troubles after his long-time personal lawyer Michael Cohen admitted several charges, including illegally using campaign contributions to pay off a porn star and a Playboy model ahead of the 2016 election.
Cohen also said he had done so “at the direction of a candidate for federal office” and with the aim of influencing the election.
The claim could put Trump in legal jeopardy and raises the prospect that Cohen is about to open up to lawyers for the Russia investigation.
The news broke after US stock markets closed on Tuesday, when the S&P 500 hit a record high, and Wall Street opened lower on Wednesday.
The Dow dipped 0.08 percent and the S&P 500 shed 0.1 percent in the first minute of trading.
“US stocks are lower in early action, following the recent rally that has the markets near record high territory, with resurfacing turmoil in the White House countering upbeat results from Target and continued signs of potential progress on the global trade front,” said analysts at Charles Schwab brokerage.
Europe’s main indices were narrowly mixed in afternoon trading, while Asia’s top markets mostly ended higher.
Also Tuesday, Trump’s one-time campaign chairman Paul Manafort was convicted on eight counts, including bank fraud, tax fraud and a failure to declare foreign bank accounts.
However, Richard Harris, chief executive officer at Port Shelter Investment Management, said he thought Trump would ride out the storm.
“I don’t think that what we saw… in terms of Manafort and Cohen are necessarily fatal to the president,” he told Bloomberg TV.
“There are quite a lot of things that could continue and he could still ride them out. It takes an awful lot to impeach a president and it may take an awful lot for Trump not to be elected for a second term.”
On currency markets meanwhile, the dollar continued to stutter after Trump’s negative remarks about the Federal Reserve’s interest rate rises.
The pound was one of the best performers against the greenback, breaking above $1.29 for the first time in almost two weeks after top European Union negotiator Michel Barnier said officials would now work non-stop on Brexit talks, which are in their final stage.
Over in Frankfurt, shares in German auto parts giant Continental dropped more than 13 percent Wednesday after the group said annual profits would be slashed by falling sales and higher costs. Continental pulled down shares in German carmakers, and the blue-chip DAX 30, which was off 0.08 percent in afternoon trading.
Wall Street on Wednesday is set to reach a new landmark on the longevity of the rising market that started in 2009 just after the global financial crisis.
The S&P 500 will mark 3,453 straight days without suffering a drop of 20 percent from its peak. That makes it the longest “bull market,” according to leading Wall Street statisticians.
New York – Dow Jones: DOWN 0.06 percent at 25,806.53 points
London – FTSE 100: UP 0.2 percent at 7,580.73
Frankfurt – DAX 30: DOWN 0.08 percent at 12,375.18
Paris – CAC 40: UP 0.2 percent at 5,416.75
EURO STOXX 50: UP 0.3 percent at 3,420.37
Tokyo – Nikkei 225: UP 0.6 percent at 22,362.55 (close)
Hong Kong – Hang Seng: UP 0.6 percent at 27,927.58 (close)
Shanghai – Composite: DOWN 0.7 percent at 2,714.61 (close)
Euro/dollar: UP at $1.160 from $1.1569 at 2100 GMT
Pound/dollar: DOWN at $1.2921 from $1.2895
Dollar/yen: UP at 110.35 yen from 110.27 yen
Oil – Brent Crude: UP $1.44 at $74.07 per barrel
Oil – West Texas Intermediate: UP $1.30 at $67.14—AFP