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Global Markets Suffer Slight Losses as U.S. Tariffs and Weak Economic Data Take Toll
In a day marked by uncertainty and sluggish economic indicators, global markets experienced slight losses on Wednesday. The decline in exports, largely attributed to U.S. tariffs, has been a significant contributor to this downward trend.
The broader Topix Index in Japan fell by 0.5%, with the Nikkei Index following suit, dropping by 1.4% to 42,923 points. Japan's exports decreased by 2.6% in July, marking the sharpest decline in four years. This contraction in exports has raised concerns about the country's economic health and its impact on global trade.
European stocks also started the day with slight losses. The Euro Stoxx 50 Index fell by 0.6%, while the DAX was down 0.7% to 24,249 points. The decline in the DAX was partly due to Berenberg's downgrade of K+S, a fertilizer and salt producer, from "Buy" to "Sell". Berenberg also reduced its price target for K+S stocks to 11 euros from 17 euros, leading to a 3.2% drop in K+S stocks in Frankfurt trading.
The U.S. markets closed mixed on Tuesday, with technology stocks under pressure. U.S. indices remained volatile as investors awaited the U.S. Federal Reserve's release of its latest meeting minutes later today. Meanwhile, the Fed's annual symposium in Jackson Hole is set to begin on Thursday.
In China, the central bank kept interest rates unchanged for the third consecutive month, offering a glimmer of stability in the midst of global economic uncertainty. However, the news was not all positive, as SoftBank Group's shares dropped by 6.9%, and Advantest's shares decreased by 5.7%.
Weak economic data has been a significant dampener of sentiment. Takeshi Minami, chief economist at Norinchukin Research Institute, expressed concern about potential pass-through of costs to U.S. consumers due to the decline in exports. The 10-year German Bund yield decreased slightly, from 2.75% to 2.74%, reflecting investors' cautious approach.
The euro increased slightly, up 0.1% to $1.1635 in early trading, providing a modest boost to European markets. Despite the day's losses, investors remain hopeful that positive news and policy decisions may stem the tide of economic uncertainty in the coming days.
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