Europe stocks mixed after Asia declines due to tech slowdown
European benchmarks were mixed on Tuesday after gains in most Asian markets despite weakness in tech stocks, including Japan’s SoftBank.
These concerns come on top of worries about inflation and what central banks might do to curb this trend. Higher interest rates tend to hurt stock prices.
The fighting in Ukraine and the attacks on Europe’s largest nuclear power plant are other factors weighing on the markets.
Moscow and Kyiv have accused each other of bombing a nuclear power plant in Russian-occupied southeastern Ukraine, attacks that have fueled international concerns. The Zaporizhzhia nuclear power plant has six nuclear reactors and the fighting around it has increased the danger of a nuclear accident.
France’s CAC 40 gained less than 2 points to 6,526.13, while Germany’s DAX fell 0.4% to 13,632.20. Britain’s FTSE 100 gained less than 0.1% to 7,489.68. Futures on the S&P 500 and the Dow Jones Industrial Average edged up 0.2%.
In Asian trading, Japan’s benchmark Nikkei 225 fell nearly 0.9% to end at 27,999.96.
Japanese tech investor SoftBank Group Corp. fell more than 7%. On Monday, it announced a record quarterly loss of $23 billion. A global plunge into tech issues, such as Chinese e-commerce giant Alibaba, weighed on his sprawling portfolio of investments.
Australia’s S&P/ASX 200 edged up 0.1% to 7,029.80. The South Korean Kospi edged up 0.4% to 2,503.46.
Hong Kong’s Hang Seng erased earlier gains, falling 0.2% to 20,003.44, while the Shanghai Composite edged up 0.3% to 3,247.43.
Analysts monitoring Asian markets said regional tensions remained a risk due to the flare-up between China and Taiwan after US spokeswoman Nancy Pelosi’s recent visit to Taiwan.
China said it was extending threatening military exercises around Taiwan, disrupting sea and air traffic and raising concerns over trade.
“It is worth following the geopolitical landscape, as any major developments on the China/Taiwan front could impact the overall demand for risk. China has confirmed that it will expand military exercises around Taiwan and that the military would conduct ‘regular’ drills on the eastern side of the Taiwan Strait midline,” said Anderson Alves of ActivTrades.
The rise in COVID-19 cases in China, Japan and some other Asian countries is also concerning, and their potential impact on supply chains that are a lifeline for some of the region’s biggest manufacturers.
Tech stocks were the biggest drag Monday on Wall Street. The S&P 500 slipped 0.1% to 4,140.06 and the Nasdaq lost 0.1% to 12,644.46. The Dow Jones Industrial Average closed 0.1% higher at 32,832.54. The Russell 2000 rose 1% to 1,941.21.
It’s been a busy week as investors wonder if the US Federal Reserve’s efforts to calm the economy and rein in inflation are working, or if the central bank will continue to aggressively raise interest rates. Investors fear that the Fed will brake too hard and cause a recession.
The Fed is expected to raise short-term interest rates an additional 0.75 percentage points at its next meeting.
The US Department of Labor will release its July consumer price report on Wednesday, followed by its wholesale price report on Thursday. Last week, reports showed that the US job market remains strong.
Investors are still eyeing the latest round of corporate earnings, which could also provide more detail on how hard inflation is hitting consumers and businesses.
In energy trading, benchmark U.S. crude fell $1.37 to $89.39 a barrel in electronic trading on the New York Mercantile Exchange. It added $1.89 to $90.76 a barrel on Monday.
Brent crude, the international standard for crude pricing, fell $1.41 to $95.24 a barrel.
In currency trading, the US dollar fell to 134.90 Japanese yen from 134.98 yen. The euro traded at $1.0239, falling from $1.0193.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama