Asian stocks were mostly higher Wednesday following Wall Street’s decline as traders looked ahead to British elections.
KEEPING SCORE: The Shanghai Composite Index rose 0.8 percent to 3,128.61 and Hong Kong’s Hang Seng added 0.2 percent to 26,043. Tokyo’s Nikkei 225 lost 0.2 percent to 19,937.09 and Seoul’s Kospi was off 0.1 percent at 2,366.34. Sydney’s S&P-ASX 200 advanced 0.1 percent to 5,671.00 and benchmarks in Taiwan and Southeast Asia also gained.
WALL STREET: U.S. stocks declined for a second day after bad news for retailers and banks. Macy’s sank more than 8 percent after warning profit margins might be weaker. Banks fell as the yield on the 10-year Treasury slipped, which would mean lower rates on loans and smaller profits. The Standard & Poor’s 500 index fell 0.3 percent to 2,429.33. The Dow Jones industrial average slid 0.2 percent to 21,136.23. The Nasdaq composite index lost 0.3 percent to 6,275.06.
ANALYST’S TAKE: “The U.K. election result will give direction to sterling and the future Brexit talks,” Margaret Yang of CMC Markets said in a report. “‘Risk-off’ sentiment is likely to prevail as any surprises from the U.K. election, the ECB’s policy outlook or changes in the White House could significantly impact the market. This has led to a hunt for safety, with gold, silver and the Japanese yen advancing to their highest levels in a month.”
BRITISH ELECTION: Investors are looking to parliamentary elections Thursday for clarity about Britain’s exit from the European Union and currency policy. Prime Minister Theresa May called a snap vote in hopes of increasing her Conservatives’ majority ahead of Brexit talks. But after two deadly attacks, the focus has shifted to security, raising questions about May’s record as a former minister in charge of security services. Opinion polls show various results from a Conservative lead to a dead heat with the opposition Labour party.
TRUMP TROUBLES: The White House and its allies are scrambling to offset potential damage from fired FBI Director James Comey’s congressional testimony about his discussions with President Donald Trump about the investigation into Russia’s possible election meddling. Comey’s testimony Thursday will be his first public comments since he was abruptly ousted by Trump on May 9. The former director’s associates say Trump asked Comey if he could back off an investigation into Michael Flynn, who was fired as national security adviser because he misled the White House about his ties to Russia. To undermine Comey’s credibility, White House officials and an outside group plan to hammer him for misstatements he made about Democrat Hillary Clinton’s emails during his last appearance on Capitol Hill.
ECB WATCH: Investors looked ahead to Thursday’s policy meeting of the European Central Bank. Following a recent decline in inflation, the bank is not expected to signal it is ready to ease up on monetary stimulus, even though growth across the region has picked up momentum.
QATAR TENSIONS: Kuwait tried to mediate an end to a diplomatic rift between Qatar and its neighbors that has roiled energy markets. Saudi Arabia and other Arab powers cut land, sea and air routes into the peninsula nation on Monday over accusations it supports extremist groups and Iran. Qatar is one of the largest suppliers of natural gas and is a base for some 10,000 American troops. Qatar denies funding extremists.
ENERGY: Benchmark U.S. crude retreated 8 cents to $48.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped 79 cents on Tuesday to close at $48.19. Brent crude, used to price international oils, shed 7 cents to $50.05 in London. It rose 65 cents in the previous session to $50.12.
CURRENCY: The dollar gained to 109.50 yen from Tuesday’s 109.39 yen. The euro declined to $1.1266 from $1.1278.
