Global stocks mixed as 'contentious' G7 summit looms

Global stocks were mixed on Wednesday as investors girded themselves for what German Chancellor Angela Merkel called a "contentious" summit of Group of Seven nations later this week.

European stocks were little changed but Wall Street posted handsome gains, lifted by a rally in bank shares and some industrial companies.

The Dow gained 1.4% and the Nasdaq ended at its third straight record.

But policy makers were readying themselves for some awkward exchanges at this weekend's G7 summit in Quebec, which comes after US President Donald Trump slapped Canada, Mexico and the European Union with steel and aluminum tariffs.

In response to Trump's punitive tariffs on metals, Canada, the EU and Mexico have all announced retaliatory measures.

"We know certainly that there will be frank and sometimes difficult discussions around the G7 table, particularly with the US president on tariffs," Canadian Prime Minister Justin Trudeau.

Trudeau had hoped to put the focus on jobs, security concerns, cleaning up the world's oceans and empowering women. But officials have conceded the G7 agenda is likely to be overtaken by trade disputes.

'Buckle up'

"Investors should buckle up for a potential showdown as trade is expected to be a major talking point throughout the summit," said FXTM analyst Lukman Otunuga. "With escalating trade tensions seen as a significant threat to global economic growth, this could be a G7 meeting like no other."

Meanwhile, official data showed that the US trade deficit narrowed in April for a second straight month.

The total trade deficit fell 2.1% for April to $46.2bn after a downward revision for March. The result was better than analysts expected since the consensus forecast called for an increase.

The ECB's chief economist Peter Praet said policymakers would discuss when to wind down the massive bond-buying scheme that has propped up the eurozone economy for the past three years.

Praet's comments helped lift the euro and also reverberated through US markets.

Analysts said the comments confirmed a process of monetary tightening and this lifted US Treasury yields and boosting expectations that banks would make more money from higher interest rates.

JPMorgan Chase, Citigroup and Bank of America all won at least 2%.

Another outperformer was Tesla Motors, which soared 9.7% as chief executive Elon Musk expressed confidence that the company would reach production targets for its Model 3 sedan.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
ZAR/USD
17.40
(+0.27)
ZAR/GBP
22.82
(-0.20)
ZAR/EUR
20.62
(-0.18)
ZAR/AUD
12.48
(+0.15)
ZAR/JPY
0.16
(+0.30)
Gold
1939.10
(+0.98)
Silver
26.61
(+3.90)
Platinum
952.50
(+2.75)
Brent Crude
45.32
(+2.09)
Palladium
2189.00
(+2.60)
All Share
57326.65
(-0.16)
Top 40
52991.28
(-0.25)
Financial 15
10199.47
(+0.59)
Industrial 25
75759.33
(-0.59)
Resource 10
58956.31
(-0.06)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 986 votes
It depends on how the funds are used.
74% - 6550 votes
No. We should have gotten the loan elsewhere.
15% - 1367 votes
Vote