Healthcare companies such as GSK plc and tech companies such as Siemens AG were among the top losers on European markets on Wednesday morning.
ADVERTISEMENTEuropean markets opened downbeat on Wednesday morning amid escalating geopolitical tensions, especially in the Middle East.
Britain’s FTSE 100 opened 0.3% lower on Wednesday morning, with Compass Group plc, GSK plc and Flutter Entertainment being some of the main losers.
Germany’s DAX index also dropped 0.3%, pulled down by Siemens AG and Deutsche Bank AG. France CAC 40 index dipped 0.2% on Wednesday morning, with the STOXX 600 index also sliding 0.3%.
Tensions in the Middle East have been heating up, with Israel launching its worst strike on Gaza since its ceasefire agreement with Hamas back in mid-January this year.
Russian prime minister Vladimir Putin, meanwhile, dashed hopes of a Russia-Ukraine peace deal. He revealed that while he would stop attacks on Ukrainian energy sites, he would not be agreeing to the 30-day ceasefire suggested by the US.
Markets were also jittery following US president Donald Trump’s reiteration that sectoral and reciprocal tariffs will come into effect on 2 April. Investors are also looking forward to the US Federal Reserve’s March interest rate decision due later on Wednesday.
Kyle Chapman, FX markets analyst at Ballinger Group, nonetheless said that markets will be taking a break from trade policy and geopolitics ‘to digest a series of central bank decisions over the next couple of days”.
“I suspect Powell would prefer to skip today’s rate decision given the impossible job of creating economic projections in this environment,” he continued.
Asia-Pacific markets overnight
Japan’s benchmark Nikkei 225 closed around 0.3% lower on Wednesday, at 37,751.9, as the Bank of Japan ended up holding interest rates as expected by the market.
Pantheon Macroeconomics said in a note: “Externally, the committee is wary of what President Trump may do in early April, when reciprocal tariffs are proposed- with Japan likely to be a target- and has preferred to hold fire until more clarity emerges.”
“Indeed, the BoJ in its policy statement today newly highlighted ‘high uncertainties’ surrounding growth and prices, including the ‘evolving situation regarding trade and other policies in each jurisdiction’. So far, developments suggest Japan is unlikely to secure a tariff reprieve from the US, and the stakes are high.”
China’s Shanghai Composite Index slid 0.1% to 3,426.4 on Wednesday, as stocks pulled back from a recent tech and stimulus-driven rally. Increasing calls to cut China’s access to US chips also dampened markets.
Hong Kong’s Hang Seng index inched up 0.1% to 24,771.1 on Wednesday morning.
Australia’s S&P/ASX 200 index closed 0.4% lower at 7,828.3 on Wednesday, whereas South Korea’s Kospi index rose 0.6% to 2,628.6.
US markets, closing prices on Tuesday
US stocks pulled back from a two-day rebound on Tuesday, ahead of the US Federal Reserve’s March interest rate decision due later on Wednesday.
ADVERTISEMENTThe S&P 500 fell 1.1% on Tuesday, mainly dragged down by cruise companies such as Royal Caribbean Cruises and Norwegian Cruise Line, as well as car giant Tesla.
The NASDAQ 100 also closed 1.7% lower on Tuesday, with mobile technology company AppLovin, Tesla and online marketplace Mercado Libre being some of the biggest losers. However, companies like Intel and Coca-Cola European saw a boost.
Similarly, the Dow Jones Industrial Average Index closed 0.6% lower on Tuesday, primarily weighed down by companies like Nvidia and IBM.
Commodities and currencies
In commodities, US crude oil dropped 0.4% to $66.6 per barrel on Wednesday morning, with Brent crude oil also dipping 0.4% to $70.3 per barrel.
ADVERTISEMENTGold hit a fresh record high on Wednesday morning, rising 0.30% to $3,040.8 per ounce. Investors flocked to the safe haven asset amid escalating geopolitical tensions, especially in the Middle East.
The EUR/USD pair lost 0.4%, whereas the EUR/GBP pair advanced 0.2%.