Stock Market News Today 2018/08/15
Turkey raises tariffs on US products as row escalates
Ankara launches retaliation for ‘deliberate attacks’ on economy. Turkey has raised tariffs on American cars, alcohol and cigarettes on Wednesday as a row with Donald Trump continued to escalate.
Fuat Oktay, the country’s vice-president, announced the tit-for-tat measures on Twitter in what he said was retaliation for “deliberate attacks” on the Turkish economy by the US administration.
The measures, published in Turkey’s official gazette, doubled tariffs on a series of imported American goods. They raised tax on US alcohol to 140 per cent, cars to 120 per cent and leaf tobacco to 60 per cent.
Tariffs were also doubled on cosmetics, rice and coal. The move provided a fresh challenge to the embattled Turkish lira, which had recouped some of its recent heavy losses on Tuesday. The Turkish lira was 1 per cent weaker at TL6.4176 to the dollar.
Turkey and the US have been locked in a bitter row over the continued detention of Andrew Brunson, an Evangelical pastor from North Carolina who was arrested in Turkey in October 2016.
Mr Trump has repeatedly demanded the release of Mr Brunson, whose fate has the most prominent cause in a wider range of simmering tensions between the two Nato member states. Earlier this month, the US president imposed sanctions on two US ministers in a bid to force Turkey to send him home. Last week he president doubled tariffs on imported Turkish aluminium and steel.
Recep Tayyip Erdogan, the Turkish president, has responded furiously to the row, which has compounded concerns about his country’s fragile economy in the eyes of international investors and piled pressure on the Turkish lira. The currency has lost more than 40 per cent of its value against the dollar this year.
Europe Open: UK CPI, house prices
The chief executives of the UK’s biggest listed companies received an 11 per cent raise last year pushing their median pay up to £3.93m, according to a report which found that full-time workers received a 2 per cent rise over the same period.
The figures for FTSE 100 bosses include base salary, bonuses and other incentives and have been revealed at a time of growing shareholder activism over big payouts. Shareholders at companies including BT, Royal Mail and WPP have rebelled against chief executive pay at stormy annual investor meetings this year.
The UK government has announced some action to try to address unequal corporate pay — from 2020, large UK listed companies will be required to publish and justify the pay gap between chief executives and staff, and spell out to investors the impact of future share price rises on executive pay.
In markets, the dollar index, a measure of the greenback against a basket of peers was 0.1 per cent stronger taking it to a new 14-month high as concerns over Turkey remained in play. The Turkish lira, which has been knocked lower of late in the wake of US sanctions was 1.9 per cent weaker at TL6.4883 to the dollar. The pound was down 0.2 per cent, and at its lowest since June 2017 at $1.2696 while the euro was 0.2 per cent weaker at $1.132.
Asia-Pacific equities fell on Wednesday with Hong Kong’s Hang Seng index shed 1.8 per cent putting it on track for its lowest close in almost a year as heavyweight Tencent fell. The Topix index was down 1 per cent while the S&P/ASX 200 rose 0.2 per cent.
Futures tip the FTSE 100 to rise 0.1 per cent and the S&P 500 is set to dip 0.2 per cent.
Corporate earnings and updates for Wednesday include Balfour Beatty and Admiral. The economic calendar is focused on the UK (all times London).
Dollar strengthens, pound falls to fresh 14-month low
The pound dipped below $1.27 for the first time since June 2017 and the renminbi hit a fresh one-year low as the dollar strengthened on Wednesday.
The dollar index, a measure of the greenback against a basket of peers, continued its recent climb, rising 0.1 per cent to 96.842, its strongest since the end of June 2017.
Sterling dipped to a low of $1.2691, its weakest in 14 months, and the euro was 0.2 per cent weaker at $1.1321.
The onshore renminbi, which trades 2 per cent on either side of a daily mid point set by the People’s Bank of China, was 0.3 per cent weaker at Rmb6.9006, having touched its weakest since May 2017. The offshore renminbi was down 0.2 per cent at Rmb6.9155, also its weakest in 15 months.
The Turkish lira, which has been battered in recent days by US sanctions on the country and concerns over Ankara’s control over the economy, was 2.7 per cent weaker at TL6.5345 per dollar.
Xiaomi, China Tower drop below IPO pricing
Three major Chinese companies listed in Hong Kong – China Literature, Xiaomi and China Tower – on Wednesday saw their share prices drop below where the stocks had priced in recent highly-anticipated public listings, in the latest sign of weakening investor demand for some China-focused companies.
China Literature dropped 3.2 per cent to HK$53.75 and slipping past the HK$55 mark it debuted at late last year. Shares in the Tencent-backed ebook company plunged on Tuesday after it announced it was splashing out $2.3bn to buy a film and television production company, New Classics Media.
Technology giant Xiaomi was down as much as 5.5 per cent at HK$16.22, having priced at HK$17 a share last month. The company has previously blamed is lacklustre IPO in part on the US-China trade war.
And shares in China Tower, the world’s largest telecommunications tower group, were off 1.6 per cent at HK$1.25. The company’s stock starting trading at HK$1.26 on August 8, in what was the world’s largest flotation since 2016.
After the listing of China Tower, Hong Kong Exchanges and Clearing chair Laura Cha warned that escalating US-China trade tensions were casting a “dark cloud” over global markets.