World shares mostly down ahead of key central banker meeting

Kelvin Chan, The Associated Press</span>
Published Monday, August 21, 2017 5:53AM EDT

HONG KONG -- World stocks were mostly lower Monday as U.S. and South Korean joint military drills kept markets on edge and investors awaited a key meeting of central bankers later this week.

KEEPING SCORE: European shares fell in early trading. France's CAC 40 lost 0.6 per cent to 5,085.74 and Germany's DAX shed 0.5 per cent to 12,108.34. Britain's FTSE 100 dipped 0.2 per cent to 7,311.36. Wall Street was poised to open lower. Dow futures were down 0.2 per cent at 21,650.00 and broader S&P 500 futures fell 0.2 per cent to 2,422.10.

WAR GAMES: U.S. and South Korean forces kicked off annual joint military exercises that could further rile North Korea. The war games have the potential to stoke geopolitical tensions and market jitters more than usual, given recent threats by both U.S. President Donald Trump and North Korea.

MOUNTAIN MEETING: Central bank officials from around the world will be gathering for an annual three-day conference at a mountain resort in Jackson Hole, Wyoming, starting Thursday. Investors will be scrutinizing remarks from policymakers including Fed chief Janet Yellen and European Central Bank head Mario Draghi for any hints on the future direction of interest rates and economic stimulus programs, which will have implications for global stock markets.

MARKET VIEW: "All eyes turn to Wyoming this week, where central bank heads and academics come together to swap ideas, and this time, in all probability, to ask, 'Where on Earth is the inflation we all expected, and what do we do with rates?"' said ING Economist Rob Carnell.

DEAL CONFIRMED: A surge in state-owned telecom group China Unicom's shares helped shore up markets in China. The stock, which resumed trading Monday after being suspended for four months, jumped the maximum 10 per cent daily limit in Shanghai after the company confirmed a plan to raise nearly $12 billion through a private share placement to big investors including tech giants Alibaba, Tencent and Baidu as part of an ownership reform plan. The plan was announced last week, but the announcement was then withdrawn, sparking confusion. Unicom's Hong Kong shares, which had been suspended since Wednesday, jumped as much as 10 per cent.

ASIAN SCORECARD: Japan's benchmark Nikkei 225 index lost 0.4 per cent to close at 19,393.13 and South Korea's Kospi dipped 0.1 per cent to 2,355.00. Hong Kong's Hang Seng rose 0.5 per cent to 27,179.39 and the Shanghai Composite Index added 0.5 per cent to 3,286.91. Australia's S&P/ASX 200 shed 0.4 per cent to 5,725.90. Taiwan's benchmark crept up a fraction and indexes in Southeast Asia were mostly lower.

ENERGY: U.S. benchmark crude oil futures slipped 5 cents to $48.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.42, or 3 per cent, to settle at $48.51 a barrel on Friday. Brent crude, the international standard, lost 22 cents to $52.50 a barrel in London.

CURRENCIES: The dollar weakened to 108.93 yen from 109.20. The euro slipped to $1.1745 from $1.1761.

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