June 12: Stock markets retreated Wednesday after a recent rally, taking their lead from a Wall Street dip overnight.

Asian markets kicked off the losses after two days of healthy gains, with Hong Kong the worst performer — sinking two percent as a huge anti-government protest paralysed key roads in the city before turning violent.

European indices followed suit with losses of around half a percent in midday deals.

Profit-takers moved in also as traders keep a nervous eye on developments in the China-US trade saga ahead of an expected meeting between Donald Trump and Xi Jinping at the G20 summit in Japan this month.

The dollar traded mixed on Wednesday, while oil prices tumbled more than 2.5 percent.

“After the Dow Jones saw its gains peter out on Tuesday night, stalling the index's sprightly start to June, the European markets drifted lower,” noted Connor Campbell, analyst at Spreadex trading group.

“There isn't a whole lot for the European indices to deal with… meaning any shift in trading is either going to come from a political surprise, or from this afternoon's US inflation data, which is under increased scrutiny due to the market's recent Fed focus.”

Stock markets have rallied in recent days on the prospect of a US interest rate cut and broader central bank dovishness helping to offset lingering US-China trade war tensions.

US Commerce Secretary Wilbur Ross has tempered expectations that the US and China will reach an agreement when Trump and Xi meet.

Elsewhere on Wednesday, oil prices slumped after data pointed to a jump in US stockpiles, exacerbating worries about oversupply and weakening demand growth.

“Oil prices have struggled to retain (recent) bullish gains as traders stay cautious over heightened geopolitical risks and persistent weakness in the global economic backdrop,” said Benjamin Lu, commodities analyst with Phillip Futures in Singapore.

Lu and other analysts said oil prices had been winning support from expectations that OPEC and Russia would agree at a meeting this month to extend output cuts beyond June.

On the corporate front, bosses at French carmaker Renault were expected to face robust questioning by shareholders on Wednesday following the collapse of merger plans with Fiat Chrysler, and its troubled alliance with Nissan mired in fresh crisis.

Key figures around 1045 GMT

• London – FTSE 100: DOWN 0.7 percent at 7,347.18 points
• Frankfurt – DAX 30: DOWN 0.4 percent at 12,108.06
• Paris – CAC 40: DOWN 0.6 percent at 5,378.08
• EURO STOXX 50: DOWN 0.4 percent at 3,385.99
• Tokyo – Nikkei 225: DOWN 0.4 percent at 21,129.72 (close)
• Hong Kong – Hang Seng: DOWN 1.7 percent at 27,308.46 (close)
• Shanghai – Composite: DOWN 0.6 percent at 2,909.38 (close)
• New York – Dow: DOWN 0.1 percent at 26,048.51 (close)
• Euro/dollar: DOWN at $1.1320 from $1.1328 at 2040 GMT
• Pound/dollar: UP at $1.2750 from $1.2723
• Dollar/yen: DOWN at 108.35 yen from 108.51 yen
• Oil – Brent North Sea: DOWN $1.47 at $60.82 per barrel
• Oil – West Texas Intermediate: DOWN $1.40 at $51.87 per barrel.

AFP/APP

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