Global Stocks Gain as U.S. Delays Technology Export Ban

By Nathan Allen 

European stocks opened higher Tuesday, following a broadly positive session in Asia after the Trump administration said it would grant temporary exemptions to the export blacklist against Huawei Technologies.

The Stoxx Europe 600 rose 0.2% in opening trade, with the U.K's FTSE 100 up 0.4% and Germany's DAX up 0.5%.

In Asia, China's Shanghai Stock Exchange was up 1.2%, while Korea's Kospi was trading 0.3% higher, though Hong Kong's Hang Seng dipped 0.2%.

The U.S. Commerce Department overnight said it would grant 90-day licenses for some companies to continue exporting to Huawei and its associates, providing some respite after the crackdown on the Chinese telecom prompted a retreat from U.S. technology stocks, dragging down major indexes.

The S&P 500 closed 0.7% lower and the Dow Jones Industrial Average shed 0.3%, while the tech-heavy Nasdaq Composite declined 1.5%.

Last week's order effectively banned technology suppliers from exporting chips or other sensitive equipment to Huawei without a license, citing national-security concerns. To comply with the order, Alphabet Inc.'s Google said it would restrict Huawei's access to certain features of its Android operating system, while German chip maker Infineon said it would suspend deliveries to the Chinese group.

Jasper Lawler, head of research at London Capital Group, said yesterday's selloff served as a reality check for the Trump administration, demonstrating how pervasive Huawei's goods are and how intertwined the group has become with its counterparts in the U.S.

"This won't be a one-day event. Huawei is entrenched on so many parts of the tech sector, this could take days or weeks to untangle," he said.

In the U.S., futures pointed to opening gains of around 0.4% for the S&P 500, and 0.3% for the Dow Jones Industrial Average and 0.5% for the Nasdaq-100.

The yield on 10-year U.S. Treasurys edged up to 2.408% from 2.405% on Monday. Yields move inversely to prices. German 10-year government bonds were in negative territory at -0.086%.

In commodities, global benchmark Brent crude oil was up 0.4% at a $72.24 barrel, while gold ticked down by 0.1%.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.1%.

Write to Nathan Allen at [e-mail]

(END) Dow Jones Newswires

May 21, 2019 03:58 ET (07:58 GMT)

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