SINGAPORE, April 10 2018 : Asian shares edged lower today as Wall Street retreated from its highs after the FBI raided the offices of U.S. President Donald Trump’s long time lawyer, dampening risk appetite already under strain from an escalating U.S.-China trade spat.
The sharp pull-back on Wall Street late in yesterday’s trading seems to be dampening market sentiment, said Hirofumi Suzuki, an economist for Sumitomo Mitsui Banking Corporation in Singapore.
“U.S. equities rapidly lost momentum and so sentiment wasn’t that positive in the end,” Suzuki said.
News that the Federal Bureau of Investigation had raided the offices and home of Trump’s personal lawyer Michael Cohen on Monday had put a dampener on equities, which had rallied on signs of cooling in the China-U.S. trade spat.
On Wall Street yesterday, the S&P 500 stock index .SPX gave up intraday gains as much as 1.9 percent to end up 0.3 percent.
Markets are keenly awaiting a speech by Chinese President Xi Jinping at the Boao Forum today, which could elicit Xi’s first reaction on the tariff standoff with the United States.
Yesterday, China stepped up its attacks Washington over billions of dollars worth of threatened tariffs, but Trump again voiced optimism the two sides would hammer out a trade deal.
Global equities managed to rally overnight on hopes the two sides will cool tensions and avert a full-scale trade row, with oil prices up more than 2 percent overnight for their biggest daily percentage gain since March 21.
Brent crude futures rose $1.54 to settle at $68.65 a barrel.
Russian stock indexes and the rouble both fell sharply yesterday after the United States hit Russian companies and officials with new financial sanctions to punish Moscow for a range of activities, including alleged meddling in the 2016 U.S. election.
The dollar-denominated RTS stock market index .IRTS slid 11.4 percent, its largest single-day drop since December 2014, while the rouble RUB= slid more than 4 percent against the dollar, the biggest loss since January 2015.
The U.S. dollar nursed its losses after slipping against a basket of six major currencies on Monday, hampered by persistent worries about the U.S.-China trade conflict.
The dollar index held steady at 89.805, after shedding 0.3 percent yesterday.
The euro inched up 0.1 percent to $1.2327 EUR=, clinging to the gains made yesterday when it rose 0.3 percent as comments from European Central Bank President Mario Draghi were seen as supportive for the common currency.