European stocks retreat on Italy budget worries
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LONDON: Europe's stock markets slid on Tuesday (Oct 2) as traders worried about Italy's budgetary spending, while US markets rose in defiance of lingering concerns over trade wars.The euro eased against the dollar, while oil prices fell back after a recent surge.
"Renewed fears about the US-China trade dispute and the state of Italian politics has shaken European equity markets," noted David Madden, market analyst at CMC Markets UK."Now that the US has wrapped up its North American trade deal, it can focus on readdressing the trading imbalance with China."Wall Street, meanwhile, "avoided European losses", said Spreadex analyst Connor Campbell, "suggesting Brexit and Italy as the session's more pressing issues, rather than Trump's claim that it's 'too early' for trade talks with China".Earlier in Asia, Hong Kong ended sharply lower, with investors there playing catch up after a long weekend.
Going against the grain Tuesday, Tokyo's benchmark Nikkei index rose for a third straight session to a fresh 27-year high on a cheap yen and advances on Wall Street.ITALY'S 'COLLISION COURSE'In Europe, "stock markets and the single currency are trading in the red ... with Italian fiscal concerns continuing to weigh on the region", said Craig Erlam, senior market analyst at Oanda."Investors have become increasingly concerned about the coalition government's spending plans, with the deficit under the proposals being larger than many had expected and leaving Italy on a collision course with Brussels."
Eurozone finance ministers on Monday warned Italy to abide by EU rules on public spending, just days after Rome announced a big spending boost in defiance of Brussels.Elsewhere on Tuesday, oil pulled back after a blistering rally.Crude has motored in recent weeks on concerns about supplies after sanctions are imposed on Iran next month, while OPEC's decision not to ramp up output, upheaval in Venezuela, a strong dollar and a drop in oil rigs have also pushed prices higher.Both main contracts jumped almost three per cent on Monday, with observers and key players in the sector now eyeing US$100 a barrel for Brent."The market's very keen to figure out the size of the impact from the Iranian supply disruptions and whether Saudi Arabia and Russia are able to make up for the losses," said Kim Kwangrae, a commodities analyst at Samsung Futures."At the same time, the US-Mexico-Canada Agreement is also improving the overall sentiment on oil."Key figures around 1540 GMT:London - FTSE 100: DOWN 0.3 per cent at 7,474.55 points (close)Frankfurt - DAX 30: DOWN 0.4 per cent at 12,287.58 (close)Paris - CAC 40: DOWN 0.7 per cent at 5,467.89 (close)EURO STOXX 50: DOWN 0.7 per cent at 3,388.99New York - Dow Jones: UP 0.4 per cent at 26,754.75Tokyo - Nikkei 225: UP 0.1 per cent at 24,270.62 (close)Hong Kong - Hang Seng: DOWN 2.4 per cent at 27,126.38 (close)Shanghai - Composite: Closed for public holidayEuro/dollar: DOWN at US$1.1563 from US$1.1578 at 2020 GMTPound/dollar: DOWN at US$1.2975 from US$1.3037Dollar/yen: DOWN at 113.56 from 113.96 yenOil - Brent Crude: DOWN 15 cents at US$84.83 per barrelOil - West Texas Intermediate: DOWN 15 cents at US$75.15 per barrel
Source : https://www.channelnewsasia.com/news/business/european-stocks-retreat-on-italy-budget-worries-10784408