Worries over Syrian conflict pulls on markets
AP and AFPLONDON/HONG KONG--Renewed worries about a possible U.S. military strike against Syria sent global stock markets lower Wednesday.
September 5, 2013, 12:01 am TWN
Optimism brought about by strong economic indicators, particularly a manufacturing survey in the U.S., dissipated amid fears of a possible escalation in Syria's civil war following a chemical attack that killed scores of civilians. The U.S. government contends the regime of Syrian President Bashar Assad is responsible.
“Investors are set to stay cautious with one eye on the Syria development” ahead of this week's G-20 gathering of world leaders in Russia and U.S. employment data on Friday, said Gary Yau, an analyst at Credit Agricole CIB.
The so-called U.S. non-farm payroll figures, released this Friday, are a closely watched indicator of the country's economy and can set the tone for the markets for weeks to come.
Britain's FTSE 100 lost 0.5 percent to 6,434.37 while Germany's DAX declined 0.5 percent to 8,136.87 and France's CAC-40 dropped 0.7 percent to 3,946.69.
Wall Street was expected to slip on the open — Dow Jones industrial futures were 0.1 percent lower at 14,810, while S&P 500 futures were down the same rate at 1,637.75.
President Barack Obama has faced difficulty trying to amass support for U.S. military intervention in Syria, where an alleged chemical attack by government forces killed scores of civilians outside of Damascus. Britain's parliament voted against involvement, and Russia, a strong ally of Syria, has been sharply critical.
But Obama got a critical boost on Tuesday when a top U.S. lawmaker said he backed the U.S. president's call for a military strike. That intensified worries about the possible expansion of a conflict in an already volatile region of the world.
Still, the investment mood had been supported somewhat this week by an increase in corporate deal-making and growing confidence in the global economy. Verizon agreed Monday to buy out the remaining stake in its mobile phone business from Vodafone in a massive US$130 billion deal and Microsoft announced Tuesday it would take over Nokia's smartphone business and a portfolio of patents and services.
As for asian markets, they were mixed on Wednesday as profit-taking and renewed concern about a US strike on Syria tempered buying sentiment, although Tokyo recouped early losses as the dollar approached 100 yen.
Wall Street provided a positive lead after the United States followed China and Europe in posting upbeat manufacturing data that raised hopes for the global economic outlook.
Tokyo ended 0.54 percent higher, adding 75.43 points to 14,053.87, following gains of more than four percent in the previous two sessions. Shanghai was up 0.21 percent, or 4.51 points, at 2,127.62.
Hong Kong fell 0.31 percent, or 68.36 points, to 22,326.22, while Sydney slipped 0.67 percent, or 35.0 points, to 5,161.6 and Seoul closed flat, edging down 0.71 points to 1,933.03.
Gold cost US$1,402.57 an ounce at 1035 GMT, up from US$1,393.90 late Tuesday.