World shares fall ahead of U.S. jobs data as tensions weigh

Annabelle Liang, The Associated Press</span>
Published Friday, October 5, 2018 5:37AM EDT

SINGAPORE -- European and Asian markets were mostly lower Friday as traders awaited the release of U.S. jobs data amid a swirl of allegations against China.

KEEPING SCORE: Germany's DAX lost 0.8 per cent to 12,146.80 and the CAC 40 in France dropped 0.4 per cent to 5,388.49. Britain's FTSE 100 fell 0.8 per cent to 7,362.21. Wall Street was set for a lacklustre open. Dow futures shed 0.2 per cent to 26,604.00 and the S&P 500 future contract fell 0.2 per cent to 2,901.70.

ASIA'S DAY: Japan's benchmark Nikkei 225 fell 0.8 per cent to 23,783.72, and the Kospi in South Korea dropped 0.3 per cent to 2,267.51. Hong Kong's Hang Seng fell 0.2 per cent to 26,572.57. Australia's S&P/ASX 200 gained 0.2 per cent to 6,185.50. Stocks tumbled in Taiwan and fell throughout Southeast Asia. Markets on the Chinese mainland were closed.

CHINESE MEDDLING: U.S. Vice-President Mike Pence has accused China of taking public and covert measures to interfere in the upcoming U.S. midterm elections. This includes targeting Chinese tariffs to industries in states that are crucial to Trump, intimidating scholars, and coercing U.S. businesses to speak out against the Trump administration, he said. Chinese foreign ministry spokeswoman Hua Chunying said Pence's allegations were "groundless."

ALLEGED CHIP HACK: Shares in Lenovo Group and ZTE Corp. tumbled in Hong Kong after Bloomberg reported that China had inserted tiny chips into servers and computer equipment manufactured for the U.S. to steal its technology secrets, citing corporate and government sources. Apple and Amazon dismissed the report. Lenovo said Super Micro was not a supplier "in any capacity." But its shares fell as much as 20 per cent on Friday, recouping some of that to finish down 15 per cent. ZTE was off 11 per cent before closing 0.4 per cent lower.

ANALYST'S TAKE: "Risk sentiments remain fragile, especially with overnight news about China's tiny chip hack and U.S. Vice-President Mike Pence's tough words on China's alleged interference in U.S. politics, which could point to a further escalation of the ongoing US-China trade war," said Selena Ling, chief economist at OCBC Bank.

ENERGY: Benchmark U.S. crude added 41 cents to $74.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 2.7 per cent to settle at $74.33 per barrel in New York. Brent crude, used to price international oils, gained 29 cents to $84.47 per barrel. It shed 2 per cent to $84.58 per barrel in London.

CURRENCIES: The dollar was flat at 113.86 yen. The euro fell to $1.1494 from $1.1515.

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