Yahoo Finance Asian Shares Boosted by Trade Deal Optimism, European Stocks Mixed after Brexit Extension Announcement
The major European stock indexes are trading mixed at the mid-session, shortly before the U.S. cash market opening. During trading hours, the news broke that the European Union granted the United Kingdom a three-month Brexit extension. However, trader reaction was muted with most investors focused on corporate earnings. Asian shares traded higher on the hope of a U.S.-China trade deal.
At 11:38 GMT, the UK’s FTSE 100 Index is trading 7315.04, down 9.43 or -0.13%. Germany’s DAX is at 12952.70, up 58.19 or +0.45% and France’s CAC is trading 5726.61, up 4.46 or +0.08%.
EU Grants UK Three-Month Brexit Extension
According to reports, European Council President Donald Tusk announced the bloc’s decision Monday morning on Twitter. The U.K. will now be able to leave the EU at any point before January 31 providing British Prime Minister Boris Johnson can secure approval from Parliament on his exit deal.
Furthermore, Johnson’s government on Sunday increased pressure on opposition leaders to hold an early general election in December in order to break the long-standing impasse in the U.K.’s Parliament over Brexit.
Mixed Earnings Equals Mixed Indexes
Early in the session, Europe’s largest lender HSBC reported an 18% drop in third-quarter pre-tax profits compared to the same period last year, sending the stock 4.7% lower.
Dutch conglomerate Phillips shares traded lower even though it posted stronger earnings. Eurofins Scientific and Ubisoft shares rose.
Asia Pacific Shares Up
The major Asia Pacific stock indexes traded higher on Monday with most of the price action driven by optimism that the United States and China were close to finalizing “phase one” of a partial trade deal.
On Friday, the Office of the U.S. Trade Representative said the two economic powerhouses have “made headway on specific issues and the two sides are close to finalizing some sections of the agreement.”
On Saturday, China’s Commerce Ministry said both side have agreed to properly address core issues, according to a Reuters report. The ministry said in a statement both side have confirmed that the U.S. will import cooked poultry from China, while Beijing will lift a ban on U.S. poultry.
Trade War Damages
China’s National Bureau of Statistics reported on Sunday that profits at the country’s industrial sector fell 5.3% in September year-on-year.
Hong Kong’s Financial Secretary Paul Chan said in a blog post on Sunday, according to a Reuters report, that Hong Kong is now in a recession and it is “extremely difficult” to achieve the government’s original forecast of 0% to 1% annual growth made before the protests.
This article was originally posted on FX Empire
