Investors Fear Recession After Trump Threatens Tariff On Mexico

3 min read | May 31, 2019 01:30 PM AEST | By Team Kalkine Media

Global Markets: Equity benchmark indices again turned in red on the last trading session of May, with Dow Jones Industrial Average plunged around 299.10 points or 1.19% lower against the previous day closing price and quoting at 24,870.78, the S&P 500 Index slumped by 31.33 points or 1.12% to 2,757.53 and the technology benchmark index Nasdaq Composite was trading lower at 7,466.33 and down by 101.39 points or 1.34% against the previous day close, at the time of writing.

Global News: US President Donald Trump on Friday pressurised Mexico by threatening to impose a 5% tariff starting on June on all goods coming from Mexico unless the country stopped people from illegally crossing the border. This sent benchmark Treasury yields to 20-month lows as investors sought safe assets. Further heightening tensions between the US and China, the China commerce ministry threatened to unveil a list of "unreliable" foreign firms that harm China's national security.

European Markets: The London’s broader equity benchmark index FTSE 100 traded at 56.45 points or 0.78% lower at 7,161.71, the FTSE 250 index snapped 141.26 points or 0.74% lower at 18,970.25, and the FTSE All-Share Index ended 30.31 points or 0.77% lower at 3,923.87 respectively. European benchmark index STOXX 600 ended 3.01 points or 0.81% lower at 369.06 respectively.

European News: The Director-General of the Confederation of British Industry warned that leaving the EU without a deal would cause long-term damage to British competitiveness and SME would be particularly hit hard. Figures released on Friday by the Central Bank showed that unsecured consumer lending eased to 5.9% from 6.4% in March, the weakest annual rate in nearly five years. Nationwide reported that house price growth slowed unexpectedly in May, increasing by 0.6% in May compared with a year ago after rising by 0.9% in April, the slowest rate in three months.

London Stock Exchange (LSE)

Top Performers Stocks: VIVO ENERGY PLC (VVO), LONMIN PLC (LMI), and CENTAMIN PLC (CEY) surged by 7.68 per cent, 7.45 per cent and 5.06 per cent respectively.

Top Laggards Stocks: COUNTRYWIDE PLC (CWD), GULF MARINE SERVICES PLC (GMS), and PREMIER OIL PLC (PMO) decreased by 8.10 per cent, 7.61 per cent and 6.93 per cent respectively.

FTSE 100 Index

 FTSE100 Index: 5-days Price Chart as on May 31, 2019. (Source: Thomson Reuters)

Top Risers Stocks: FRESNILLO PLC (FRES), SSE PLC (SSE) and NATIONAL GRID PLC (NG.) rose by 3.06 per cent, 2.81 per cent and 1.90 per cent respectively.

Top Fallers Stocks: NMC HEALTH PLC (NMC), HIKMA PHARMACEUTICALS PLC (HIK) and ASHTEAD GROUP PLC (AHT) reduced by 6.24 per cent, 3.33 per cent and 2.51 per cent respectively.

Top Active Volume Leaders: LLOYDS BANKING GROUP PLC, VODAFONE GROUP PLC, and BARCLAYS PLC.

Top Riser Sector: Utilities (+1.82%).

Top Fallers Sectors: Basic Materials (-1.55%), Consumer Non-Cyclicals (-1.14%) and Financials (-1.05%).

Foreign Exchange and Fixed Income

FX Rates*: GBP/USD and EUR/GBP were exchanging at 1.2637 and 0.8841 respectively.

10-Year Bond Yields*: US 10Y Treasury and UK 10Y Bond yields were trading at 2.140% and 0.888% respectively.Â

*At the time of writing


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