STOCK REPORT – Chinese news reverberated through various markets on Tuesday, with markets tumbling for a second day.
Wall Street previously closed lower on news that China let its currency sink. Asian markets quickly followed suit after China also ditched buying US farm goods.
All these new developments—or lack of progress—contributed to fears that the ongoing trade war between the US and China could harm the global economy.
Tokyo dropped 2%, while China’s main index plunged 2.5%. Stock exchanges in Hong Kong, Sydney, and Seoul all tumbled.
However, markets steadied a bit by the mid-session, with US futures indicating a recovery.
China, with whom the US has been locking horns over tariffs and trade, allowed the renminbi to fall past 7.0000.
Markets treat this level as politically and psychologically important. It comes in the wake of US President Donald Trump’s announcement of plans for additional Chinese tariffs.
European Stock Exchanges Stabilize; Vivendi-UMG Deal in Focus
Over in Europe, stock report has been slightly bullish, with markets bouncing up. Stocks recouped a little less than half of their losses.
STOXX 600 was 0.6% higher, while Germany’s DAX gained 0.7% thanks to the stabilization of June factory orders. Denmark’s OMX Copenhagen 20 index soared 1.2%.
On the flipside, UK FTSE underperformed, with only 0.1% gain.
European markets absorbed the news regarding the Chinese yuan after US decided to tag the Asian country as “currency manipulator.”
This move appears to be ironic, as the People’s Bank of China attempted to fight the downward pressure on the renminbi.
For individual stocks, Vivendi, a French entertainment group, soared 7% after a deal announcement. The company is in talks to sell a 10% stake in Universal Music Group to China’s Tencent Holdings.
The deal price valued UMG at 30 billion euros, or $33.6 billion. Vivendi said it’s still looking for more partners. Still, the deal would allow China’s Tencent to buy 10% more stake at the same price.