Most Gulf stocks ease on weak earnings
Most stock markets in the Gulf fell in early trade on Tuesday due to lacklustre earnings and concerns about U.S. investment curbs on China.
U.S. President Donald Trump ordered to restrict Chinese investments in strategic areas such as chips, artificial intelligence and aerospace.
Also weighing on sentiment was Trump’s indication that proposed tariffs on Mexico and Canada were still set to start next week, although investors had hoped negotiations would forestall the threat.
Saudi Arabia’s benchmark stock index dropped 0.5 percent, with ACWA Power Company retreating 3.2 percent.
ACWA Power reported annual profit ahead of analysts’ estimates but missed on revenue.
Among other losers, Saudi Ceramic Company tumbled 8.6 percent after reporting an annual loss.
Yanbu National Petrochemical Company slid 2.4 percent after its 2024 profit missed analysts’ estimates.
Dubai’s main share index fell 0.2 percent, pressured by a 0.9 percent fall in toll operator Salik Company, while Emirates NBD eased 0.2percent.
ENBD, Dubai’s top lender, made a mandatory cash offer to buy Emirates Islamic Bank at 11.95 dirhams ($3.25) per share.
In Abu Dhabi, the stock index was flat.
European stocks flat
European shares were flat on Tuesday as defence stocks climbed, offsetting declines in technology stocks that came on the back of worries over an intensifying U.S.-China technology war.
The pan-European STOXX 600 index was up 0.07 percent as of 0816 GMT.
The technology index was a major drag and fell 0.9 percent.
The U.S. is planning to toughen semiconductor restrictions on China, continuing and expanding the Biden administration’s efforts to limit Beijing’s technological prowess, Bloomberg News reported on Monday.
Semiconductor stocks STMicroelectronics fell 1.4 percent and ASML lost 1.6 percent.
Meanwhile, AI-exposed stocks such as Schneider Electric and Siemens Energy shed 1.3 percent and 2.2 percent, respectively.
Asian stocks slide on US curbs on China
Asian shares slid on Tuesday amid worries about U.S. investment curbs on China, while a run-up in the euro faded as investors wait for Germany to sort out the formation of its new government with no major surprises.
Gold hit a record high on tariff concerns. Investors are also cautious ahead of results from AI darling Nvidia, where options point to a share price move of about 8 percent in either direction should they surprise.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.3 percent. Japan’s Nikkei returned from a public holiday with a drop of 0.9 percent, but shares of its five major trading houses surged thanks to interest from billionaire investor Warren Buffett.
Bank of Korea on Tuesday cut its interest rates by a quarter-point as expected, helping South Korean shares trimming some losses.
Hong Kong’s Hang Seng index tumbled 2.3 percent, extending the fall from Monday after U.S. President Donald Trump signed an order to restrict Chinese investments in strategic areas such as chips, AI and aerospace. Chinese blue chips dropped 0.9 percent.
Japan’s Nikkei closes at three-month low
Japan’s Nikkei share average closed at its lowest in three months on Tuesday as major technology shares tracked Wall Street losses overnight and on weaker sentiment amid speculation that the U.S. could toughen semiconductor restrictions on China.
The Nikkei finished down 1.4 percent at 38,237.79, its lowest closing level since November 29, while the broader Topix was 0.4 percent lower at 2,724.7.
The tech-heavy Nasdaq closed down more than 1 percent on Monday, as investors worried about demand for tech supporting artificial intelligence while they waited for results from market heavyweight Nvidia.
Meanwhile, Bloomberg News reported on Tuesday that U.S. officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron and ASML engineers from maintaining semiconductor gear in China as the U.S. looks to limit China’s technological prowess.
Japan’s Tokyo Electron declined 4.9 percent and peer Advantest, which counts Nvidia among its customers, shed 6.5 percent.
At the open Indian benchmarks flat
India’s benchmark indexes were off to a muted start on Tuesday as gains in heavyweight financials were offset by losses in information technology stocks.
The Nifty 50 inched 0.02 percent higher to 22,557 by 09:16 a.m. IST, while the BSE Sensex was little changed at 74,440.3.
Eight of the 13 major sectors advanced at the open. The broader, more domestically focussed small-caps and mid-caps rose 0.4 percent and 0.2 percent, respectively.
Asian markets slipped on the day, with the MSCI Asia ex Japan down 0.9 percent, mirroring overnight losses in the U.S.
IT fell 0.4 percent, extending Monday’s losses, on concerns over slowing U.S. growth as they get a significant portion of their revenue from the country, while financials were up 0.2 percent.
Australian shares end lower
Australian shares settled lower on Tuesday as weak corporate earnings of Domino’s Pizza and Johns Lyng Group soured market sentiment, with consumer discretionary and technology stocks leading the decline.
The S&P/ASX 200 index fell 0.7 percent to 8,251.9, posting its sixth session of loss in seven.
Weak U.S. market leads and “nasty” corporate results dragged down the benchmark, said Henry Jennings, a senior market analyst at Marcus Pty.
The Nasdaq and the S&P 500 fell overnight as investors worried about demand for technology supporting artificial intelligence.
In Sydney, Domino’s Pizza Enterprises closed 10.5 percent lower and was among the top laggards, after the pizza chain operator posted first-half profit below expectation. It was the top loser on the consumer discretionary sub-index, which fell 2.7 percent.
Building services provider Johns Lyng Group plunged 33.4 percent to post its lowest close since early-September 2020, after reporting weaker-than-expected first-half results. The stock was the top drag on the benchmark index.