Morning Message

Mid-Week Market Update

Wednesday 12th April 2017

US stocks declined amid concerns over geopolitical risks weighing on sentiment as investors awaited the start of US corporate earnings reporting. The Dow Jones Industrial Average (-0.03%), S&P 500 (-0.14%) and the Nasdaq Composite (-0.24%) all retreated. Worries over rising tensions between the United States and Russia, Syria and North Korea drove investors into gold and other safe haven assets. US Secretary of State Rex Tillerson carried a message from world powers to Moscow on Tuesday denouncing Russian support for Syria. Adding to this, North Korea state media warned of a nuclear attack on the United States if provoked as a US Navy strike group moved toward the western Pacific. United Continental fell -1.1% after a worldwide backlash erupted against the airline over a passenger who was dragged off one of its US flights. Late in the session, its CEO issued an apology.

Asian stocks closed mixed as tensions continue to ratchet up on the Korean Peninsula following a warning from North Korea of a nuclear attack on the US. The Hang Seng (+0.74%) and the S&P/ASX 200 (+0.08%) gained, while the Nikkei 225 (-1.04%) declined. Telstra fell more than -7% after TPG Telecom secured licences in the government’s latest auction of mobile spectrum and the company unveiled plans to build its own network. Toshiba dropped -1.03% after filing results without a sign off from auditors, after twice delating the release in previous months. Toshiba also warned that the future survival of the company was in doubt.

European shares rose this morning, driven by gains in financials and carmakers, as first quarter earnings season kicked off and a rise in the oil price supported energy stocks. The ESTX 50 (+0.58%), UK markets (+0.42%), Dax (+0.60%) and the CAC 40 (+0.59%) all posted gains in early trading. Daimler gained +2% after it said first quarter profits jumped 87% in a surprise release Tuesday evening, on strong Mercedes sales. Dialog Semiconductor fell -2.5% after losing -14% in the previous session after an analyst report said its biggest client Apple could be seeking to ditch it. Banco Popular rose +3.6% having hit a fresh low at the opening. The struggling Spanish bank was down -18% since announcing it would raise more capital on Monday. Tesco Plc fell -2.6% after posting forecast beating full year profit.

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