Majority Gulf markets ease
Most stock markets in the Gulf ended lower on Monday mirroring global declines as excitement over a potential US interest rate cut in September faded.
Federal Reserve Chair Jerome Powell on Friday signalled a possible rate cut at the Fed’s meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn’t set in stone.
Saudi Arabia’s benchmark index gave up early gains to edge 0.1 percent lower, hit by a 0.8 percent fall in the country’s biggest lender Saudi National Bank.
Elsewhere, oil giant Saudi Aramco dropped 0.3 percent.
European stocks fall on French political risks
European shares dropped on Tuesday, led by losses in France as the country’s minority government looked increasingly likely to be ousted next month, while mounting concerns over the U.S. Federal Reserve’s independence curbed appetite for riskier assets globally.
France’s main stock index fell 2.1 percent and its bonds stumbled as the three main opposition parties said they would not back a confidence vote which Prime Minister Francois Bayrou announced for September 8 over his plans for sweeping budget cuts.
The previous government under Prime Minister Michel Barnier also fell to a no-confidence vote in December, underscoring persistent political instability in the euro zone’s second-largest economy.
South Korean stocks fall
South Korean shares fell on Tuesday, as investors booked profit after a US summit, particularly in shipbuilding stocks, a key sector of potential for cooperation, following recent gains.
The benchmark KOSPI was down 29.85 points, or 0.93 percent, at 3,180.01 as of 0328 GMT, after three consecutive sessions of gains.
South Korean President Lee Jae Myung is leaning on promises to “Make America Shipbuilding Great Again” during his first official US trip, as the two allies wrangle over other details of their trade and security agreements.
“The shipbuilding sector rose in recent days on hopes of cooperation with the US and is now seeing profit-taking after the summit,” said Lee Sung-hoon, an analyst at Kiwoom Securities.
Shipbuilders Hanwha Ocean and HD Korea Shipbuilding & Offshore Engineering fell more than 5 percent, while HD Hyundai Heavy Industries lost more than 3 percent.
Japan’s Nikkei touches 2 weeks low
Japan’s Nikkei share average fell to a two-week low on Tuesday, as the yen strengthened after US President Donald Trump said he would fire Federal Reserve Governor Lisa Cook.
As of 0049 GMT, the Nikkei dropped 1.4 percent to 42,215.57, hitting its lowest level since August 12. The broader Topix slipped 1.19 percent to 3,068.57.
The yen rose about 0.4 percent to 147 yen against the US dollar after Trump took the unprecedented action of firing Lisa Cook, the first African-American woman to serve as a Federal Reserve governor, over claims of mortgage borrowing impropriety.
India’s share benchmarks may open lower
India’s equity benchmarks are expected to open marginally lower on Tuesday, weighed by concerns over U.S. tariffs after Washington issued a draft notice for levying up to 50 percent tariffs on Indian goods from Wednesday.
Gift Nifty futures were trading at 24,914.5 points as of 07:49 a.m. IST, indicating that the Nifty 50will open below Monday’s close of 24,967.75.
U.S. President Donald Trump had announced 25 percent punitive tariffs on Indian goods over New Delhi’s purchase of Russian oil amid the war in Ukraine, adding to the 25 percent duties already in effect.
The U.S. Department of Homeland Security outlined the procedure to implement the additional 25 percent tariffs on Indian goods in a draft notice on Monday.
A planned visit by U.S. trade negotiators to New Delhi from August 25-29 has been called off, dashing hopes that the tariffs might be lowered or postponed.
The steep 50 percent tariffs would mean Indian goods will face one of the highest U.S. levies, putting it at a significant disadvantage against regional competitors, such as Vietnam and Bangladesh.
Asian shares down
Asian stocks retreated Tuesday after a series of market-rattling announcements by US President Donald Trump, including an unusual move to fire a central bank official and threats to impose export controls on microchips.
Traders had been riding a wave of confidence since Friday’s speech by US Federal Reserve Chairman Jerome Powell, which suggested coming interest rate cuts in the world’s largest economy.
But the upward flurry appeared to die out Monday on Wall Street as attention turned back to this week’s earnings report from AI chip giant Nvidia – a bellwether for the industry as concerns over a tech bubble mount.
Asian markets notched mostly moderate losses on Tuesday, tracking drops made the previous day in New York and Europe.
Tokyo’s main index recorded one of the more pronounced slides, finishing 1 percent lower. Hong Kong, Shanghai, Seoul and Sydney were also down, while Taipei was slightly up.
Early trading in Europe saw London, Paris and Frankfurt all decline.
Weighing on investors’ minds was Trump’s Monday evening announcement in the United States that he was removing Federal Reserve governor Lisa Cook, citing allegations of false statements on her mortgage agreements.
Shanghai share benchmark hits decade high
China and Hong Kong stocks jumped on Monday to extend a rally, led by rare earth and property sectors, as abundant liquidity fuelled continued gains.
At the midday break, the Shanghai Composite index was up 0.9 percent at 3,858.59, a fresh 10-year high.
China’s blue-chip CSI300 index added 1.4 percent, surpassing the intraday high made last October to reach a four-year peak.
Turnover on the Shanghai and Shenzhen exchanges surpassed 2 trillion yuan for a ninth consecutive day, extending the longest such streak on record.
The rare earth sector was up 5.6 percent and the artificial intelligence sector up 3.5 percent.
The property sector jumped 5.8 percent, with developer China Vanke surging by the 10 percent daily limit, as Shanghai eased house purchasing restrictions.