Global stocks slump as investors worry about North Korea bomb test

HONG KONG - World stock markets mostly slumped Wednesday after a North Korean nuclear test unnerved investors and a report showing weakness in China's service industries renewed worries about growth in the world's No.

See Full Article

2 economy.

KEEPING SCORE: European stocks fell in early trading. France's CAC 40 was down 0.6 per cent to 4,509.41 and Germany's DAX shed 0.6 per cent to 10,247.44. Britain's FTSE 100 lost 0.7 per cent to 6,094.83. U.S stocks were poised to open lower. Dow futures dropped 0.9 per cent to 16,924.00. Broader S&P 500 futures slumped 1.1 per cent to 1,990.30.

NUCLEAR TEST: North Korea announced it had carried out a hydrogen bomb test, after South Korea detected an "artificial earthquake" near the North's main nuclear test site. The test is likely to raise tensions in the region and make investors more cautious and less willing to place risky bets. The surprise announcement makes it tougher to curb North Korea's longstanding efforts to establish an arsenal of nuclear-armed long-distance missiles.

SERVICE SLIDE: A monthly survey of China's service industries slipped to a 17-month low, renewing fears among investors that the world's No. 2 economy was facing stronger headwinds. The Caixin/Markit survey of service industry purchasing managers slipped to 50.2 in December from 51.2 the previous month. The index is based on a 100-point scale with numbers above 50 indicating expansion. Service industries have helped offset weakness in trade and investment as China's economy undergoes a painful slowdown, but the latest figures show momentum is slowing.

QUOTEWORTHY: "I didn't expect 2016 to be anything other than a roller-coaster, but we're really starting off the roller-coaster really early," said Michael Every, head of Asia-Pacific financial market research at Rabobank. The poor Caixin reading and a weakening yuan that hurts China's export rivals were bad enough, but now "you have North Korea letting off a hydrogen bomb, not just a nuclear test, but a stronger nuclear bomb," he said. "You wonder how much worse things could get."

CHINA MEASURES: Stocks in China rebounded on news that Beijing would keep market steadying measures in place. The China Securities Regulatory Commission said that when a six-month old ban on sales by large shareholders ends this week, new restrictions will take effect. Stockholders owning more than 5 per cent of a company will be required to sell their shares in private transactions rather than on the open market to avoid shocks to the market, the regulator said.

ASIAN SCORECARD: Most regional benchmarks closed lower. Japan's Nikkei 225 index lost 1 per cent to close at 18,191.32 and South Korea's Kospi fell 0.3 per cent to end at 1,925.43. Hong Kong's Hang Seng shed 1 per cent to 20,980.81 but the Shanghai Composite Index in mainland China rebounded 2.3 per cent to 3,361.84. It slumped 6.9 per cent on Monday and 0.3 per cent on Tuesday. Australia's S&P/ASX 200 retreated 1.2 per cent to 5,123.10.

ENERGY: Crude futures gave up their early gains, with benchmark U.S. oil falling 53 cents to $35.44 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents, or 2.1 per cent, to settle at $35.97 a barrel on Thursday as demand appeared to weaken because of large global stockpiles. Brent crude, a benchmark for international oils, lost 72 cents to $35.69 a barrel in London.

CURRENCIES: The dollar slipped to 118.52 yen from 119.13 yen in the previous day's trading. The euro weakened to $1.0730 from $1.0744.



Advertisements

Latest Economic News

  • Shares in British Airways' parent company tumble

    Economic CTV News
    LONDON -- Shares in British Airways' parent company have tumbled after a catastrophic IT failure stranded thousands of passengers during a holiday weekend. Shares in the International Airlines Group dropped about 3 per cent in the first day of trading Tuesday after a weekend that saw hundreds of flights cancelled. Source
  • Scotiabank boosts second quarter profit by 30 per cent to $2.06 billion

    Economic CTV News
    TORONTO -- Scotiabank (TSX:BNS) had $2.06 billion of net income in the second quarter, up 30 per cent from a year ago. The earnings amounted to $1.62 per share, compared with $1.23 or $1.58 billion during the second quarter of 2016. Source
  • Quebec government adopts law forcing construction workers back to work

    Economic CTV News
    QUEBEC -- The Quebec government passed legislation early today putting an end to the province's construction strike and forcing workers back to work by Wednesday. Members of the legislature debated the bill until early this morning, but the Liberal majority in the legislature had all but ensured it would pass, with the final vote coming in 76 to 21 in favour. Source
  • WestJet cuts back on London flights to try to curb delays and cancellations

    Economic CBC News
    Westjet has decided to reduce the number of flights it offers to London, England, this summer as it tries curb delays and cancellations caused by its aging fleet of Boeing 767s. The airline has experienced plenty of problems since it began offering direct flights from Vancouver, Calgary, Edmonton, Winnipeg and Toronto to Gatwick airport last summer. Source
  • Health Canada investigating 2 complaints of babies burned by Banana Boat sunscreen

    Economic CBC News
    Health Canada is investigating two cases where mothers reported that their babies received second degree burns after using Banana Boat sunscreen for children. "We're definitely looking into it and we're taking them very seriously," said Health Canada spokesperson, Renelle Briand. Source
  • Could medical marijuana be your next employee health benefit?

    Economic CBC News
    The winds of change are blowing through employee benefit plans across Canada, and they smell like weed. Benefits industry insider Mike Sullivan caught a whiff at a recent meeting with some of his clients, who represent private companies with benefit plans that cover about three million Canadian workers across a range of industries. Source
  • 'Barnburner' GDP reading expected for 1st quarter

    Economic CBC News
    The Canadian economy is widely expected to have roared out the gate in the first quarter with a "fantastic" start to the year. Figures for the January-March period are due to be released by Statistics Canada on Wednesday morning, with many economists predicting the reading will come in somewhere between 3.5 per cent and five per cent, on a quarter-over-quarter annualized rate. Source
  • Seniors' home workers in Alberta fighting to get first agreement to lose jobs

    Economic CTV News
    COLD LAKE, Alta. -- A company that operates long-term care homes for seniors in northeastern Alberta says it's firing current nursing care employees and going with a private contractor rather than trying to bargain a first contract with them. Source
  • Asian shares weaker as investors await economic data

    Economic CTV News
    SEOUL, Korea, Republic Of -- Asian stock markets were weaker on Tuesday as investors stayed on the sideline before the release of a raft of economic data due later this week. Markets in Shanghai, Hong Kong and Taipei were closed on a holiday. Source
  • Trans Mountain IPO to proceed despite B.C. Green-NDP deal, Kinder Morgan says

    Economic CTV News
    CALGARY -- Kinder Morgan says it expects to proceed Tuesday with its initial public offering for the Trans Mountain expansion, just as the anti-pipeline Greens and NDP in B.C. announced they have come to an agreement that could cast the project's future into doubt. Source