People are reflected on the electronic board of a securities firm in Tokyo, Tuesday, June 26, 2018. Asian markets were mostly lower on Tuesday, as moves by the U.S to gain an upper hand on trade with China weighed on the technology sector. Tech stocks have been the pillar of the Wall Street's long-running bull market. (AP Photo/Koji Sasahara)

Global stocks mixed, Chinese market enters bear market

June 26, 2018 - 7:25 am
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SINGAPORE (AP) — Global markets were mixed Tuesday as traders monitored U.S. efforts to gain an upper hand in trade with China, particularly in the technology sector. Shanghai's index entered bear market territory, having dropped over 20 percent from a recent high in January.

KEEPING SCORE: Germany's DAX was flat at 12,270 and France's CAC 40 added 0.3 percent to 5,298. Britain's FTSE 100 climbed 0.4 percent to 7,539. Wall Street is set for a weak opening after broad losses in the technology sector the day before. Dow futures were down 0.1 percent and S&P 500 futures dipped 0.2 percent.

ASIA'S DAY: The Shanghai Composite in mainland China slipped 0.5 percent to close at 2,844.51, putting it in a bear market after dropping more than 20 percent from a peak in January. The drop highlights concerns about a trade war with the U.S. Japan's benchmark Nikkei 225 index rose less than 0.1 percent to 22,342.00 while South Korea's Kospi lost 0.3 percent to 2,350.92. Hong Kong's Hang Seng shed 0.3 percent to 28,881.40. Australia's S&P/ASX 200 dipped 0.2 percent to 6,197.60. Taiwan's benchmark fell but Southeast Asian indexes were mostly higher.

TECH DOWNTURN: Eyes will be on U.S. technology stocks, which had tumbled Monday on reports that the Trump administration plans to limit exports of some high-tech products to China, and also limit investment in technology firms by companies with substantial Chinese ownership. Treasury Secretary Steven Mnuchin's suggestion that the investment restrictions wouldn't be limited to China caused stocks to slide further. The market recovered when Peter Navarro, one of President Donald Trump's top trade advisers, told CNBC that there was no plan for investment restrictions and that the administration's probe into alleged technology theft is limited to China. Tech stocks have been the pillar of Wall Street's long-running bull market. All but one of the 72 technology companies listed on the S&P 500 index closed lower Monday.

TRADE TENSIONS: U.S. efforts to secure advantages in trade are seeing some hit back. Iconic American motorcycle maker Harley-Davidson said it would move some production overseas to avoid tariffs the European Union is placing on motorcycles made in the U.S. Those tariffs were a response to taxes the U.S. placed on steel and aluminum from Europe. Harley-Davidson shares plunged 6.0 percent on Monday. In less than two weeks, tariffs imposed by the U.S. and China on each other will also kick in. A 25 percent tariff will be imposed by the U.S. on billions of dollars of Chinese products. In response, China will raise import duties on $34 billion worth of American goods. China and the European Union agreed Monday to launch a group that will, among other things, try to preserve support for international trade amid U.S. threats of import controls.

ANALYST'S TAKE: "There is a sense that trade tensions could be long drawn and somewhat more antagonistic going forward," said Vishnu Varathan, head of economics and macro strategy at Mizuho Bank.

GENERAL ELECTRIC: Shares in General Electric jumped 4.4 percent in premarket trading on reports that the company would spin off its health care business and sell its $23 billion stake in oil services company Baker Hughes. The moves, first reported by the Wall Street Journal, would be the culmination of a yearlong overhaul of the company, which is trying to boost earnings and the share price.

ENERGY: Benchmark U.S. crude was down 2 cents to $68.06 per barrel in New York. Brent crude, used to price international oils, rose 25 cents to $74.98 per barrel in London.

CURRENCIES: The dollar rose to 109.67 yen from 109.45 in late trading Monday. The euro weakened to $1.1667 from $1.1704.

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