World Economy

Europe, Asia Stocks Trade Lower

Europe, Asia Stocks Trade LowerEurope, Asia Stocks Trade Lower

Concerns over Italy’s banks and Britain’s national election campaign dominated holiday-thinned European financial markets on Monday, prodding stock markets lower after Asian share indices fell back off 2-year highs.

Sterling, hammered by a slump for Prime Minister Theresa May’s Conservatives in opinion polls last week, recovered some ground after weekend numbers confirmed the trend but showed her still on course to win next week’s vote, Reuters reported.

European share prices were a touch lower, led by a half-percent fall in banking shares as worries over recapitalizations of regional Italian lenders bled over into a second week.

European blue chips eased 0.2%, with Italy’s Banco BPM and Unicredit both down around 2%. Germany’s DAX was little changed.

Asian markets were lower overall after some early gains that largely shrugged off another missile launch by North Korea, the broad MSCI index of Asia-Pacific shares outside Japan dipping 0.2%.

Japan’s Nikkei edged up 0.2% while Australian shares fell as much as 0.8%, hit by another round of falls in the prices of oil and other commodities. China’s markets are also closed on Monday and Tuesday for a holiday.

South Korea’s KOSPI added 0.4% to touch a record high and was on track for its seventh straight day of gains. “There are not many negative factors in the market for the KOSPI, and demand seems still strong enough to push the index up a bit more,” said Kim Ji-hyung, a stock analyst at Hanyang Securities.

Philippine shares hit their highest in nearly three weeks on Monday, helped by property stocks Ayala Land Inc and SM Prime Holdings, while most other Southeast Asian markets were little changed.

Indonesia, Thailand and Singapore were slightly down, while Vietnam was up 0.5%, hovering near a nine-year high, on the back of gains in energy stocks.  

On currency markets, the dollar was broadly flat, trading at $1.118 per euro and 111.34 yen after steadying on a better batch of US economic data on Friday that solidified expectations of a rise in official interest rates next month.

San Francisco Federal Reserve President John Williams said in Singapore on Monday that medium-term trends in US inflation remained “pretty favorable,” despite some recent soft consumer price data.

After falling more than 2 cents last week, sterling was 0.25% stronger against the dollar and euro.”A lot of what we are seeing is the after effects of Friday’s news and data releases,” said Thu Lan Nguyen, a currency strategist with Commerzbank in Frankfurt.

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