LONDON – Global shares held up Tuesday despite concerns over South Korea’s Samsung Electronics which saw its share price slide after the company said it is discontinuing production of Galaxy Note 7 smartphones permanently because of overheating handsets.
KEEPING SCORE: In Europe, France’s CAC 40 rose 0.3 per cent to 10,650 while Germany’s DAX rose 0.3 per cent to 10,650. Britain’s FTSE 100 rose 0.2 per cent to 7,109 following its earlier record high of 7,129.83. U.S. stocks were poised for losses at the open with Dow futures and the broader S&P 500 futures down 0.3 per cent.
FTSE RECORD: The index struck a record high amid hopes that many of its constituent companies will benefit from the pound’s slide in currency markets. At first glance, the opposing moves may appear perverse. However, there is an underlying logic to the moves and it’s to do with the fact that the drop in the pound, while a drag on consumers’ and businesses’ spending abroad, is potentially good for those British firms that already have big business interests outside the U.K. On Tuesday, the pound fell a further 0.6 per cent to $1.2387.
ANALYST TAKE: “U.K. investors will once again be cheering the impact of a falling pound, as the drop in sterling once again works its magic on the FTSE 100,” said Chris Beauchamp, chief market analyst at IG.
SAMSUNG WOES: Shares in Samsung Electronics fell 8 per cent after the company said it was halting sales of its Note 7 smartphones. It advised customers to turn off their devices or replace them with different devices. Samsung issued a worldwide recall of the Note 7, a huge phone-bordering-on-tablet with a powerful battery, after finding the devices have a tendency to catch fire. South Korean officials said Tuesday that replacement devices have also overheated or caught fire. Unsurprisingly, Samsung’s problems were a huge weight on South Korea’s Kospi, which ended the session down 1.2 per cent at 2,031.93.
OIL AND RUSSIA: Oil prices were mixed after spiking to their highest level in a year after Russian President Vladimir Putin said Monday that Russia, which is not a member of OPEC, supports a preliminary agreement by OPEC nations to cut oil output. Benchmark New York crude was down 48 cents at $50.87 a barrel while Brent, the international standard, fell 32 cents to $52.82 a barrel.
ASIA’S DAY: Japan’s benchmark Nikkei 225 rose 1.0 per cent to finish at 17,024.76. Tokyo markets were closed Monday for a national holiday. Australia’s S&P/ASX 200 added 0.1 per cent to 5,479.80. Hong Kong’s Hang Seng dropped 1.4 per cent to 23,523.21, while the Shanghai Composite gained 0.6 per cent to 3,065.25. Shares in Southeast Asia were mixed.
CURRENCIES: The dollar remained in the ascendancy amid expectations of a rate hike from the Federal Reserve later this year. The euro was down 0.5 per cent at $1.1085 while the dollar was up 0.1 per cent at 103.72 yen.