Global shares slid, US futures, dollar drop after Moody's downgrade of US credit rating

Hong Kong, May 19 (AP) Global shares fell Monday and US futures and the dollar also weakened after Moody's Ratings downgraded the sovereign credit rating for the United States because of its failure to stem a rising tide of debt.

The future for the S&P 500 lost 1.2 per cent while that for the Dow Jones Industrial Average fell 0.8 per cent. The US dollar slipped to 144.92 Japanese yen from 145.65 yen. The euro advanced to USD 1.1254 from USD 1.1183.

The yield on the 10-year US Treasury was at about 4.54 per cent, up from 4.44 per cent late Friday.

In Europe, Germany's DAX retreated 0.1 per cent to 23,733.96 while the CAC 40 in Paris lost 0.5 per cent to 7,851.46.

Britain's FTSE 100 declined 0.5 per cent to 8,643.23.

Chinese markets fell after the government said retail sales rose 5.1 per cent in April from a year earlier, less than expected. Growth in industrial output slowed to 6.1 per cent year-on-year from 7.7 per cent in March.

That could mean rising inventories if production outpaces demand even more than it already does. But it also may reflect some of the shipping boom before some of US President Donald Trump's tariffs on Chinese goods took effect.

“After an improvement in March, China's economy looks to have slowed again last month, with firms and households turning more cautious due to the trade war,” Julian Evans-Pritchard of Capital Economics said in a report.

Hong Kong's Hang Seng lost 0.1 per cent to 23,332.72 and the Shanghai Composite Index was nearly unchanged at 3,367.58.

E-commerce giant Alibaba's shares in Hong Kong skidded 3.4 per cent following a report that US officials are scrutinising a potential Apple-Alibaba deal to integrate AI features into iPhones in China.

Tokyo's Nikkei 225 gave up 0.7 per cent to 37,498.63 while the Kospi in Seoul dropped 0.9 per cent to 2,603.43.

Australia's S&P/ASX 200 declined 0.6 per cent to 8,295.10.

Taiwan's Taiex was 1.5 per cent lower.

In oil trading early Monday, US benchmark crude oil lost 47 cents to USD 61.50 per barrel. Brent crude, the international standard, gave up 50 cents to USD 64.91 per barrel.

Wall Street cruised to a strong finish last week as US stocks glided closer to the all-time high they set just a few months earlier, though it may feel like an economic era ago.

The S&P 500 rose 0.7 per cent. It has rallied to within 3 per cent of its record set in February after it briefly dropped roughly 20 per cent below it last month.

Gains have been driven by hopes that Trump will lower his tariffs against other countries after reaching trade deals with them.

The Dow industrials added 0.8 per cent and the Nasdaq composite climbed 0.5 per cent.

Trump's trade war sent financial markets reeling because they could slow the economy and drive it into a recession, while also pushing inflation higher.

This week featured some encouraging news on each of those fronts. The United States and China announced a 90-day stand-down in most of their punishing tariffs against each other, while a couple of reports on inflation in the United States came in better than economists expected.

That uncertainty has been hitting US households and businesses, raising worries that they may freeze their spending and long-term plans. The latest reading in a survey of US consumers by the University of Michigan showed sentiment soured again in May, though the pace of decline wasn't as bad as in prior months.

Charter Communications rose 1.8 per cent after it said Friday that it has agreed to merge with Cox Communications in a deal that would combine two of the country's largest cable companies.

Hope remains that this week's better-than-expected signals on inflation could give the Federal Reserve more leeway to cut interest rates later this year if high tariffs drag down the US economy. (AP) GRS GRS

Source: PTI