The Sino-US dispute seems no closer to a resolution despite weeks of back-and-forth on what negotiators call the phase one of the deal. Messages from the two sides remain contradictory. While some Chinese officials keep saying optimistic things about the state of the talks an interview with an unnamed White House official published by Reuters Thursday poured cold water on hopes of a resolution.
The continued rumbling of protests in Hong Kong is not letting up either and Asian investors in particular are keeping a wary eye on the developments there. The local stock index Hang Seng dropped 1.6% in early trade and although indexes in Shanghai and Tokyo lost less ground, the overall sentiment remained fairly cautious.
Matthey, Mail lead fallers
Metals and chemicals firm Johnson Matthey led the FTSE fallers with a 6.56% decline after it reported a 2% decline in profits. However, unlike many other industries that fight against the tide of the times Johnson Matthey is actually well placed to benefit from calls for more environmental protection. Its trademark products are catalytic converters that control car emissions and it is working on new lines that will be used in other industries too. That explains the company’s willingness to up dividends for the year in expectations of a stronger second half performance.
On FTSE 250 the biggest story is Royal Mail with a 17.49% decline. Though the postal service reported an operating profit for the first half of the year, turning around last year’s loss, investors remain bearish on the stock. Its planned restructuring is currently behind schedule and possibly the even bigger bigger dampener is a threat of strike in December. Not least, the postal service is on Jeremy Corbyn’s nationalization radar which is adding to the stocks’ lack of popularity.
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