World Shares Retreat on Tuesday 01/22 06:02
World markets retreated Tuesday after the International Monetary Fund
trimmed its global outlook for 2019 and 2020. The downgrade came after China
said its economy grew at the slowest pace in nearly 30 years in the last
quarter of 2018.
SINGAPORE (AP) -- World markets retreated Tuesday after the International
Monetary Fund trimmed its global outlook for 2019 and 2020. The downgrade came
after China said its economy grew at the slowest pace in nearly 30 years in the
last quarter of 2018.
KEEPING SCORE: Germany's DAX gave up 0.2 percent to 11,112.96 and France's
CAC 40 was down 0.3 percent at 4,853.77. Britain's FTSE 100 was 0.3 percent
lower at 6,953.19. Wall Street, reopening after Martin Luther King Jr. Day, was
set for early losses. Futures for the broad S&P 500 index declined 0.6 percent
to 2,656.80. Dow futures dropped 0.6 percent to 24,545.00.
THE DAY IN ASIA: Japan's Nikkei 225 index shed 0.5 percent to 20,622.91 and
the Kospi in South Korea sank 0.3 percent to 2,117.77. Hong Kong's Hang Seng
lost 0.7 percent to 27,005.45. The Shanghai Composite index fell 1.2 percent to
2,579.70. Australia's S&P ASX 200 slipped 0.5 percent to 5,858.80. Shares rose
in Taiwan and Thailand but fell in Singapore.
GLOBAL GROWTH: On Monday, the International Monetary Fund cut its 2019
global growth estimate to 3.5 percent from 3.7 percent, citing trade tensions
and rising interest rates. It also revised its estimate for 2020 to 3.6
percent, down from 3.7 percent. IMF Managing Director Christine Lagarde, who
presented the forecasts at the World Economic Forum in Davos, Switzerland, said
the global economy was growing more slowly than expected amid rising risks.
Earlier in the day, China reported its economy expanded by 6.6 percent in 2018.
This was the slowest pace of growth since 1990 and it fueled fears a trade
dispute with Washington is putting a drag on the world's second largest economy.
ANALYST'S TAKE: "The IMF's prognosis is fairly dire, and the prescription is
a sensible approach of preventive management; to avoid escalating trade
disputes, lower tariffs and build fiscal or financial buffers," Vishnu Varathan
of Mizuho Bank said in a commentary.
BREXIT PLAN: British Prime Minister Theresa May presented her Plan B for
Britain's exit from the European Union on Monday, but it looks a lot like the
original. May said she will get more opinions on a widely-criticized "backstop"
in the plan, aimed at preventing a hard border between the Republic of Ireland,
part of the EU, and the U.K's Northern Ireland after Brexit. She will then
"take the conclusions of those discussions back to the EU." The bloc has said
it will not renegotiate the divorce deal, which has been resoundingly rejected
by Parliament. "This really does feel a bit like 'Groundhog Day,'" Jeremy
Corbyn, the leader of the opposition Labour Party said. In the 1993 film, a
weatherman lives out the same day over and over again.
ENERGY: U.S. crude lost 73 cents to $53.31 per barrel in electronic trading
on the New York Mercantile Exchange. The contract added 3.3 percent to $54.04
per barrel in New York. Brent crude, used to price international oils, dropped
92 cents to $61.82 per barrel. It closed at $62.74 per barrel in London.
CURRENCIES: The dollar eased to 109.44 yen from 109.65 yen late Monday. The
euro slipped to $1.1363 from $1.1366. The British pound strengthened to $1.2902