Asian markets mostly fell Friday as US President Donald Trump abruptly axed next month’s summit with North Korean leader Kim Jong Un, but Europe rebounded on hopes the pair would still meet.
Frankfurt, London and Paris equities had already skidded lower on Thursday as Trump’s announcement hit the newswires, prompting many investors to ditch risky equity investments.
But European indices bobbed higher on Friday as both Washington and Pyongyang left the door open for the summit to eventually take place.
“The focus has been firmly centred upon Donald Trump, with his decision to cancel the June meeting with Kim Jong Un bringing about a return to the risk-off sentiment,” said analyst Joshua Mahony at trading firm IG.
“However, it seems that it is the North Korean who is the pragmatist on this occasion, with his openness to reinstate the meeting helping limit the fallout from yesterday’s announcement.”
In a letter released by the White House, Trump told Kim he was cancelling the June 12 summit because of North Korea’s “anger” and “hostility”.
The message came after a key aide to Kim hit out at comments by Vice President Mike Pence, saying they were “ignorant and stupid” and warning the talks could be cancelled.
However, Trump’s letter added that the talks could still go ahead.
Markets have been jittery this week as the US president had warned in recent days that he could cancel the summit, while also voicing his displeasure at a deal to avert a trade war with China and threatening tariffs on car imports.
Thursday’s summit cancellation took many by surprise — including North and South Korean officials — and fuelled concerns about the future of a rapprochement that has had many hoping for peace on the divided peninsula.
“It looks like we are back to fire and fury as the modus operandi for the White House again after President Trump (threatened) a new 25 percent car import tariff and cancelled the summit with North Korea,” said Greg McKenna, chief market strategist at AxiTrader.
“Not only was the summit cancelled but it was back to threatening the DPRK with a military response.”
Fears for oil cap
World oil prices meanwhile dived by more than a dollar, extending Thursday’s heavy falls after Russia said an agreement with OPEC to cap production — which has provided support to prices in recent years — could be up for revision at a meeting next month.
The comments from Energy Minister Alexander Novak dented a rally in the commodity, which has hit three-and-a-half-year highs on the back of improving demand and supply worries from Venezuela and Iran.
Meanwhile Russian and Saudi Arabian oil ministers meeting in Moscow on Friday said they believe a deal is possible to gradually boost oil output from as soon as July.
Key figures around 1000 GMT
London – FTSE 100: UP 0.3 percent at 7,736.86 points
Paris – CAC 40: UP 0.6 percent at 5,581.57
Frankfurt – DAX 30: UP 1.1 percent at 12,989.76
EURO STOXX 50: UP 0.6 percent at 3,544.32
Tokyo – Nikkei 225: UP 0.1 percent at 22,450.79 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 30,588.04 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,141.30 (close)
New York – Dow: DOWN 0.3 percent at 24,811.76 (close)
Euro/dollar: UP at $1.1727 from $1.1720 at 2100 GMT
Pound/dollar: DOWN at $1.3369 from $1.3381
Dollar/yen: UP at 109.57 yen from 109.26 yen
Oil – Brent North Sea: DOWN $1.75 at $77.04 per barrel
Oil – West Texas Intermediate: DOWN $1.02 at $69.69