Global uncertainty led to late profit-taking in stock markets

London (United Kingdom) (AFP) - World stocks ran into profit-taking Friday as many investors, wary of global uncertainty and US President Donald Trump’s volatile Twitter diplomacy, cashed out before the weekend, traders said.

Key markets had posted solid gains earlier in the session after Trump put off a decision about military strikes in Syria, giving investor nerves a welcome break.

Although tensions appeared to be easing, few dared to carry positions into the weekend, fearing they may regret it come Monday morning.

“Traders remain cautious heading into the weekend,” said Craig Erlam at OANDA. “Given the backdrop of a trade conflict with China and rising tensions with Russia over Syria, any rallies may be somewhat gradual,” he said.

Wall Street was higher at the opening bell, but quickly reversed the trend, triggering a softer tone in European markets.

Despite the lacklustre ending to the week, European markets “have pulled off a third straight week of gains”, observed Jasper Lawler at LCG, crediting “Trump Twitter fatigue” for the overall resilience of equity markets.

- Cheesed off -

“Transparency helps decision-making but it can go too far. It is not just the Russians cheesed off with Trump’s Twitter diplomacy, investors are too,” Lawler said.

Sterling strength weighed on London’s benchmark FTSE 100 index, as it hurt the share prices of multinationals earning large amounts in other currencies.

“With the pound hitting a two-month high against the dollar and ten-month high against the euro, it comes as no surprise that the internationally focused FTSE 100 suffers,” noted Joshua Mahony, market analyst at IG trading group.

Trump on Wednesday sent shudders across trading floors when he warned “missiles will be coming” to Syria in response to an alleged chemical attack by the Russia-backed regime, fuelling fears of a stand-off between the major powers.

But he tempered the rhetoric a day later suggesting he might hold off on an imminent strike while he holds talks with France and Britain on how to deal with the crisis.

As investors digested the remarks, it emerged Trump had directed senior aides to explore rejoining the Trans-Pacific Partnership (TPP), which he left on becoming president, calling it a US jobs killer.

The U-turn came as he suggested the US and China might not eventually impose tariffs on each other’s goods, despite recent tit-for-tat warnings over hundreds of billions of dollars of trade.

- Back from brink, again -

“Remarkable. That’s the only thing I can really say in the past 36 hours or so about the change in tone that seems to be emanating from the president and the White House,” Greg McKenna, chief market strategist at AxiTrader, said Friday.

“President Trump is walking back from the brink on so many fronts it’s making my head spin,” he added.

The oil price rose again, adding to strong recent gains, after the IEA said that fears of fresh escalation in Syria’s war coupled with compliance with a pledge by the OPEC cartel and Russia to limit production were firmly underpinning oil prices.

- Key figures around 1540 GMT -

New York - Dow: DOWN 0.3 percent at 24,406.22 points

London - FTSE 100: UP 0.1 percent at 7,264.56 (close)

Frankfurt - DAX 30: UP 0.2 percent at 12,442.40 (close)

Paris - CAC 40: UP 0.1 percent at 5,315.02 (close)

EURO STOXX 50: UP 0.2 percent at 3,448.00

Tokyo - Nikkei 225: UP 0.6 percent at 21,778.74 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 30,808.38 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,159.05 (close)

Euro/dollar: DOWN at $1.2323 from $1.2329 at 2100 GMT

Dollar/yen: UP at 107.51 yen from 107.26

Pound/dollar: UP at $1.4252 from $1.4230

Oil - Brent North Sea: UP 43 cents at $72.45 per barrel

Oil - West Texas Intermediate: UP 28 cents at $67.35