Asian markets closed largely higher on Tuesday after a rocky start, and European markets opened in positive territory as well, boosted by the late rally in the Chinese markets. The Shanghai Composite ended the day up 1.10 percent and the Shenzhen Composite closed 1.18 percent higher. Japan’s Nikkei 225 closed a modest 0.05 percent lower and Australia’s ASX 200 closed 0.28 percent lower. Most other major indexes closed in the green, with Hong Kong’s Hang Seng Index up a respectable 0.94 percent and South Korea’s Kospi up 0.38 percent.
In Europe, an initial rally buoyed by strength in the financial sector was quickly replaced with a downturn. As of 10:34 p.m. GMT, the DAX was down 0.61 percent, the FTSE was down 0.03 percent and France’s CAC was down 0.67 percent. Worries about U.S. trade policies and the struggles of emerging market economies have continued to pressure European markets. Steep declines in the Turkish lira and Indonesian rupiah in recent sessions have done little to ease the fears.
Traders are now looking towards Wall Street to see whether its major indexes open higher after the holiday weekend or whether risk appetite on Wall Street was also diminished by President Trump’s weekend warning that Congress should stay out of the trade talks and that he would be willing to consider a new North American Free Trade Agreement without Canada, since last week’s talks were unsuccessful.
Traders are also looking towards how the U.S. dollar will fare in the face of the trade concerns as it has thus far managed to maintain its footing despite the turmoil. The euro retreated 0.53 percent against the dollar in early European trade, to trade at $1.1562. The dollar also gained against the yen, trading at 111.37.