European Markets Weak on August 11 amid Political Tensions
The United Kingdom’s FTSE 100 Index started this week on a strong note and rose on Tuesday, August 7, 2017, to the highest close in ten weeks. On Wednesday, it fell and closed below the important level of 7,500 amid the lower global risk appetite. The weakness was extended to later in the week amid geopolitical tensions. It opened lower on Friday, trading at its lowest level in three months.
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Ongoing political tensions between the United States and North Korea have been weighing on the FTSE 100 Index since August 9. In addition to political tensions, the weaker-than-expected United Kingdom’s economic data also weighed on the FTSE 100 Index. According to the Office for National Statistics, the United Kingdom’s trade balance fell 12.7 billion pounds in June, which was a larger fall than the market’s forecast of 11.0 billion pounds. At 6:35 AM EST on August 11, 2017, the FTSE 100 Index was trading at 7,304.50, a fall of 1.1%. The iShares MSCI United Kingdom (EWU) fell 1.8% to $33.62 on August 10.
Germany’s DAX Index started this week on a weaker note by pulling back on Monday. On Tuesday, the index rebounded amid supporting trade balance data and improved market sentiment. The market started to fall on August 9 amid political tensions between North Korea and the United States. On Friday, the index opened lower but traded above the opening prices in the morning session. On the economic data front and according to Germany’s Federal Statistical Office, the Germany Consumer Price Index rose 0.40% in July, which is in line with market expectations.
At 6:40 AM EST on August 11, the DAX Index was trading at 11,986.50, a fall of 0.23%. The iShares MSCI Germany ETF (EWG) fell 1.7% on August 10.
After rising for four consecutive trading days, France’s CAC 40 Index fell on Wednesday and continued the weakness to Thursday and Friday. On August 11, the index started the day lower, trading below the important support level of 5,100 in the early morning hours. At 6:45 AM EST on August 11, the index was trading at 5,061.30, a fall of 1.1%.
In the next part of this series, we’ll see how Wall Street performed on August 10.