Global Stocks Pressured by Kim-Trump Summit Failure
World stock markets came under pressure Thursday as a summit between Donald Trump and Kim Jong Un ended abruptly without an agreement.
Asian equities had been fluctuating throughout the day on tempered optimism over China-US trade talks, weak factory data from Beijing and fresh geopolitical tensions in Kashmir.
But they took a decisive turn south after an expected lunch and signing ceremony between the United States and North Korean leaders was called off at the last minutes. Asian markets were also pressured by data showing China’s manufacturing activity in February at its worst level in three years.
In Europe, Frankfurt and Paris managed a small recovery by the close, while London remained in the red. US stocks finished modestly lower following data that showed economic growth slowed in the fourth quarter but still topped analyst expectations. “Global equities in general have pulled back as risk sentiment took a hit after the US and North Korea failed to reach an agreement over denuclearization for the (Korean) peninsula,” said XTB analyst David Cheetham. “US president Donald Trump and North Korean leader Kim Jong Un abruptly cut short their summit in Hanoi, and in doing so cancelled a signing ceremony as the two leaders failed to make any tangible progress and agree terms on the deal.”
Russian TV declares the Trump-Kim summit “one more failure” for the US President & slams his record in office: “Trump worsened relations with the EU, China & Russia. There’s failure in Syria & with Turkey, with Iran & Venezuela… wherever you turn, it’s bad.” pic.twitter.com/RLTordncUr
— Steve Rosenberg (@BBCSteveR) March 3, 2019
The two sides put forward starkly different accounts over the breakdown of a high-stakes summit in Hanoi, with Trump saying the talks ended because the North Koreans wanted sanctions lifted in their entirety and North Korea saying that it promised a complete dismantling of nuclear facilities in exchange for sanctions relief. The US economic report showed growth tapered down to an annual rate of 2.6 percent in the fourth quarter, a sharp drop from 3.4 percent in the third quarter, but above the 2.3 percent expected by analysts.
“The data we had today is slightly better than people would have thought,” said Maris Ogg of Tower Bridge Advisors. “The market reaction shows us that the worst fears are not going to be realized.” Analysts have been readying for a pullback or pause in US stocks after Wall Street surged nearly 20 percent since late December.