Intel stock extends gains after report of possible U.S. government stake
* MSCI's world equity index down 0.1%
* Trump impeachment talk adds to geopolitical risk
* U.S.-China trade optimism boosts Europe
* Investors see major deal in October unlikely
* Dollar flat, euro at more than 2-year lows
* Wall Street futures gauges ESc1 up around 0.2%.
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Tom Wilson
LONDON, Sept 27 (Reuters) - World share markets dipped on
Friday, with concerns about U.S. political developments after a
whistleblower complaint against President Donald Trump denting
optimism about an easing of U.S.-China trade tensions.
MSCI's world equity index .MIWD00000PUS , which tracks
shares in 47 countries, fell 0.1% and was heading towards its
worst weekly performance since mid-August.
Asia-Pacific shares outside Japan .MIAPJ0000PUS earlier
shed 0.2%, though Europe's STOXX 600 index .STOXX fared
better, gaining 0.4% on hopes of a quick resolution to the trade
A whistleblower report released on Thursday said Trump
abused his office in trying to solicit Ukraine's interference in
the 2020 U.S. election for his political benefit, and that the
White House tried to "lock down" evidence about that conduct.
The report came after the Speaker of the U.S. House of
Representatives Nancy Pelosi this week launched an impeachment
inquiry into Trump, who has denied wrongdoing.
"What we are waiting to see is how this might impact the
U.S.-China trade negotiations," said Hugh Gimber, global market
strategist at J.P. Morgan Asset Management.
"It's that combination this week of weakening economic data
and rising political uncertainty that has caused some tricky
periods in markets."
Wall Street futures ESc1 NQcv1 were up between 0.1-0.2%.
The dollar index .DXY measuring it against a basket of
currencies was up 0.1% near a three-week high of 99.146, and on
track for its best week in a month.
Balancing worries over the ramifications of any possible
impeachment of Trump was an apparent easing of trade tensions
between Washington and Beijing.
China's top diplomat said on Thursday that China was willing
to buy more U.S. products and that trade talks would yield
results. Those comments fuelled the positive mood after Trump on
Wednesday praised the Chinese purchases, saying a trade deal
could come sooner than people thought.
European shares reacted well to those signals, also getting
a boost from moves in currency markets. London stocks
added 0.9%, buoyed by a weaker pound after a central bank
policymaker hinted at a cut in UK interest rates.
The euro EUR=EBS was pinned at its lowest level since May
2017, further helping export-oriented European stocks.
The trade war has upset financial markets and disrupted
global supply chains as the world's two largest economies heap
hundreds of billions of dollars in tariffs on each other's
products.
SCEPTICISM ON MAJOR DEAL
The two sides are prepping for another round of trade talks
scheduled for Oct. 10 and 11 in Washington, but investors voiced
scepticism at prospects of a major breakthrough then.
"There is still a huge gulf," said Eoin Murray, head of
investment at Hermes Investment Management, adding that
prospects for a deal had receded from earlier in the year.
"Around April, May time, the main sticking point was the
enforcement mechanism - but we have retreated miles from that at
this point."
Tech remains a sticking point, with reports on Thursday that
the United States is unlikely to allow American firms to supply
China's Huawei Technologies HWT.UL undermining hopes of a
broad bilateral deal. Underlining market sensitivity, European chipmakers Infineon
IFXGn.DE and Siltronic WAFGn.DE both fell around 1.5%,
mirroring losses for Asian chip-related shares Samsung
Electronics 005930.KS and SK Hynix 000660.KS .
Major Huawei supplier Micron Technology MU.O had fallen 7%
in after-hours trade after it forecast first-quarter profit
below Wall Street targets.
"Technology is at the heart of the confrontations between
the U.S. and China," said Hiroshi Watanabe, economist at Sony
Financial Holdings.
In commodity markets, oil prices fell as concerns of slowing
global demand growth and a faster-than-expected recovery in
Saudi crude oil output eased worries over potential major supply
disruptions.
Brent crude LCOc1 futures fell 27 cents, or 0.4%, to
$62.47 a barrel.
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