· Stocks in Europe started the week on a negative note as investors monitored Brexit developments and looked ahead to new U.S.-China trade talks.
The pan-European Euro Stoxx 600 index was lower with all major bourses and most sectors pushing lower. Mining stocks bucked the trend, up by over 1 percent, with the sector having a heavy exposure to China. This comes ahead of a new round of trade talks between China and the United States later in the week. Rio Tinto shares climbed 2.7 percent after a price target upgrade by Jefferies.
More generally, there has been some positive momentum on the back of the reopening of the U.S. government — after its longest shutdown in history. However, President Donald Trump told The Wall Street Journal on Sunday that another government shutdown is "certainly an option," expressing doubts that Congress would reach a deal to fund the border wall.
U.K. Prime Minister Theresa May will put her latest Brexit efforts to a vote on Tuesday. If she gets the backing from lawmakers she is set to go back to Brussels to get more concessions. However, the message from the European 27 countries remains that the current exit agreement will not be renegotiated. The impasse continues ahead of the scheduled date for departure — March 29.
· Asian shares ticked up on Monday though they retreated from earlier highs as relief on news of a deal to reopen the U.S. government following a prolonged shutdown gave way to edginess before a key round of Sino-U.S. trade talks.
MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat, pulling back after hitting its highest since Oct. 4 early in the session.
Facing mounting pressure, U.S. President Donald Trump agreed on Friday to temporarily end a 35-day-old partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a border wall.
In response Wall Street rallied broadly on Friday as investors were relieved to see an end to one of the longest U.S. government shutdown in history.
· Japan’s Nikkei fell on Monday as a stronger yen hurt sentiment and weighed on the broader market, though declines were limited by investors’ reluctance to take big positions ahead of third-quarter corporate earnings reports this week.
The Nikkei share average dropped 0.6 percent to 20,649.00 points. The broader Topix shed 0.7 percent to 1,555.51, with 32 of Topix’s 33 subsectors in the red.
“Investors have been nervous to see major manufacturers’ earnings, and thin trade has reflected their reluctance to take positions aggressively,” said Hiroyuki Fukunaga, chief executive of Investrust.
Also souring the mood, the yen advanced 0.2 percent to 109.33 against the dollar.
“The market does not want to see the strong yen especially when currency-sensitive manufacturers release their results,” Fukunaga said, adding that the Nikkei’s downside is expected around 20,000 depending on the results.
· China stocks ended lower on Monday as downbeat industrial profit data reinforced concerns about a slowing economy and dashed hopes that the new head of the country’s securities regulator could help boost a struggling market.
At the close, the Shanghai Composite index was down 0.18 percent at 2,596.98, giving up earlier gains. The blue-chip CSI300 index was down just 0.02 percent. The smaller Shenzhen index ended down 0.38 percent and the start-up board ChiNext Composite index was weaker by 0.454 percent.
China has appointed banking veteran Yi Huiman to head the China Securities Regulatory Commission (CSRC), putting governance of the nation’s stock markets in his hands at a time when investor confidence has been hit by a slowing economy and U.S. tariffs.
Reference: Reuters, CNBC