World markets lower as US presidential race tightens

An attendee wearing a plastic molded wig is escorted from the venue by security officers during a campaign event for Donald Trump, 2016 Republican presidential nominee, in Cincinnati, Ohio, US on Oct 13, 2016.
An attendee wearing a plastic molded wig is escorted from the venue by security officers during a campaign event for Donald Trump, 2016 Republican presidential nominee, in Cincinnati, Ohio, US on Oct 13, 2016. PHOTO: BLOOMBERG

LONDON (AFP) - Gains in world stocks on upbeat Chinese data fizzled Tuesday (Nov 2) as companies turned in mixed results and uncertainty mounted over the US presidential race.

Hong Kong led most major Asian markets higher after China's closely watched purchasing managers' index hit its highest level in more than two years, Beijing said, indicating that the important manufacturing sector - and the world's number two economy - is levelling out.

A separate private index also beat expectations to hit its highest mark since July 2014.

The figures come weeks after official data showed economic growth stabilising and putting the government on track to achieve its annual target, while another reading showed a first increase in factory gate prices for four years.

 

But European equities failed to hold onto early gains and Wall Street quickly headed lower after a new poll showed that just a week before voting day, the US presidential candidates are neck-and-neck.

"An initial boost from positive Chinese economic data fizzled out on Tuesday as attention turned to the rising possibility of a Trump presidency," said CMC Markets analyst Jasper Lawler.

London closed down 0.5 per cent, while Paris dropped 0.9 per cent and Frankfurt lost 1.3 per cent.

On Wall Street, the Dow Jones Industrial Average was down 0.4 per cent in midday trading.

An ABC News/Washington Post tracking poll out Tuesday found Republican presidential nominee Donald Trump edging ahead of Democratic rival Hillary Clinton by one point for the first time since May.

Trump's 46-45 percent lead in the four-way race for the White House, while well within the margin of error, possibly reflected the renewed controversy over Clinton's use of a private email server while secretary of state.

Globally, investor confidence remains fragile after Friday's bombshell news that the FBI was investigating additional emails connected to Clinton, Wall Street's preferred candidate.

Lawler said the weakness in the US dollar and Trump rising in the polls propelled gold to a three-week high of US$1,290.92.

"Gold appears to be being accumulated as a hedge against equity market declines before the US election," he said.

Better-than-expected economic data from China buoyed the mining sector because the Asian powerhouse is a leading consumer of many metals.

"The commodity space remains supported by rising metals prices and positive China data," said Mike van Dulken, head of research at trading firm Accendo Markets.

Shares in Antofagasta climbed 1.8 percent, while Fresnillo jumped 4.8 percent.

In the energy sector, British energy giant BP shed 4.5 percent after it revealed underlying replacement cost profit tumbled 49 percent to $933 million (851 million euros) in the third quarter from a year earlier.

However, rival Royal Dutch Shell said its profit - excluding one-off items and stripping out the changing value of oil inventories - advanced 17 percent to US$2.79 billion.

That eclipsed forecasts of US$1.79 billion and sent Shell's 'B' share price 4.0 percent higher in London.

Meanwhile, shares in Pfizer dropped 2.2 per cent in New York after the US pharmaceutical giant said its net profit slid 38 per cent in the third quarter to US$1.3 billion due to the hit from lost patent exclusivity on some key drugs and one-time costs on a pending divestment.