International markets add to losses on global trade concerns

Global markets retreated on Thursday as growing concerns about global trade tensions weighed on investors’ risk appetite, after United States President Donald Trump sought to impose fresh tariffs on China.

Shares on Wall Street fell for a third straight session overnight and Asian markets tracked the drop in U.S. shares early on Thursday.

“The equity market has been holding up relatively well, but it will have to decline some more if U.S. shares deepen their losses,” Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo told Reuters.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.45 percent.

In the Middle East, most stock markets fell or ended the day close to the previous session’s levels, amid profit-taking.

Saudi Arabia’s index edged down 0.03 percent to 7,775 points. Al Rajhi Bank pulled back 2.2 percent.

Saudi Automotive Services jumped 3.7 percent after its board proposed a capital increase to 600 million riyals ($160 million) from 540 million riyals, using retained earnings to fund expansion.

Retailer United Electronics climbed 6.9 percent to 67.30 riyals. EFG Hermes raised its target price for the stock to 90 riyals from 50 riyals and, earlier this month, CI Capital raised its target by 38 percent to 80 riyals.

Vijay Valecha, Chief Market Analyst at Century Financial Brokers said: “Investors have been buying Saudi equities ahead of a potential MSCI upgrade and Saudi Aramco’s initial public offering. Investors are seen buying aggressively select outperformers and also the expectations for inflows of foreign funds in coming months boosted the index to a multi-year high. If this is done, it could attract new big money from foreign funds to the market in the next coming months.”

Dubai’s index edged up 0.02 percent as builder Drake & Scull surged 2.8 percent.

Valecha said: “The Dubai index recovered from an intra-day low to close almost flat as mild buying sentiment emerged from traders who sold at higher levels.”

Neighbouring Abu Dhabi’s index fell 0.4 percent.

Egypt’s blue-chip index fell 0.6 percent on profit-taking.

Bahrain’s index was flat, Oman’s index edged down 0.1 percent, while Kuwait’s index rose 0.3 percent.

In commodities, oil prices edged up early on Thursday supported by healthy global demand. Rising U.S. production has been undermining ongoing production cuts led by OPEC to end a supply glut.

U.S. West Texas Intermediate (WTI) crude futures rose 17 cents, or 0.3 percent, to $61.13 a barrel by 0245 GMT.

Brent crude futures were at $65 per barrel, up 11 cents, or 0.2 percent.

In currencies, the dollar retreated on Thursday on concerns over a global trade war.

The dollar index, which measures the greenback against a basket of six major peers, held steady at 89.670. The dollar index has shed roughly 0.5 percent so far this week.

Gold, seen as a safe haven, edged up early on Thursday.

Spot gold rose 0.2 percent to $1,326.71 per ounce at 0108 GMT.

Valecha said on gold prices: “Gold prices inched up on Wednesday, and hit a one week high of $1330 as investors were cautious after the sudden firing of U.S. Secretary of State Rex Tillerson. The markets were edgy after U.S. President Trump fired Secretary of State Tillerson on Tuesday. Tillerson, considered more moderate in his administration, will be replaced by CIA Director Mike Pompeo.”

Valecha added: “Moreover, news of tariffs being imposed on China caused gold prices to spike further. Currently trading around $1325 level, investors await the dual US macro releases of monthly retail sales data and the latest PPI figures, for some fresh impetus.”