Global stock markets took a downward turn following Wall Street’s decline after a meeting between the top US diplomat and China’s leader failed to show any signs of progress in resolving various conflicts.
The London and Paris markets opened lower, while Shanghai, Tokyo, and Hong Kong also experienced retreats. US markets were closed for a holiday, and oil prices saw a decline.
Wall Street’s S&P 500 index dropped 0.4% on Friday after the Federal Reserve opted to keep its benchmark lending rate unchanged but warned of a potential increase in the future if necessary to counter inflation.
Chinese President Xi Jinping held talks with US Secretary of State Antony Blinken, with the Chinese government describing the discussions with foreign affairs officials as “candid and in-depth.” While there was an indication of willingness to cooperate on major issues, it remains to be seen whether this will translate into tangible positive outcomes.
Yeap Jun Rong of IG commented, “Whether that will lead to any actual positive outcomes still awaits to be seen. Any inaction on that front could still see any optimism fizzle out eventually.”
In early trading, London’s FTSE 100 dropped 0.4% to 7,608.25, Frankfurt’s DAX retreated 0.6% to 16,268.19, and Paris’ CAC 40 declined 0.5% to 7,345.33. Futures for the S&P 500 and Dow Jones Industrial Average on Wall Street were slightly lower.
Asian markets also experienced declines, with the Shanghai Composite Index losing 0.5% to 3,255.80 after the meeting between Xi and Blinken. The Nikkei 225 in Tokyo tumbled 1% to 33,370.42, the Hang Seng in Hong Kong fell 0.6% to 19,912.89, and the Kospi in Seoul retreated 0.6% to 2,609.50. However, Sydney’s S&P-ASX 200 gained 0.6% to 7,294.90.
The Federal Reserve’s decision to hold its benchmark lending rate steady, along with a survey indicating that US consumers are revising their expectations for future inflation, has contributed to uncertainties in the market. Energy markets saw a decline in benchmark US crude and Brent crude prices.
As the situation unfolds, market participants continue to monitor developments between the US and China, with hopes for progress in resolving conflicts that have impacted trade and relations between the two nations.
