There were mixed reactions following the historic meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un on Tuesday, resulting in a fall in global stocks.
Few details were given to the press on how the goals would be achieved on both sides. But, what was reported was that Trump committed to providing security guarantees while Kim Jong Un pledged to denuclearize.
The MSCI World index which encompasses shares in 47 countries fell 0.1 percent, while the dollar fell in morning trade in Europe.
Sue Trinh head of Aisa FX strategy at RBC Capital Markets said that both sides were far apart on what denuclearization means and that there was nothing particularly game changing that came out of the summit.
As far as the U.S. is concerned a complete, verifiable and irreversible denuclearization of North Korea. While for Kim it means a suspension on nuclear and missile tests and in return North Korea will get major economic concessions.
European fund manager at Old Mutual Global Investors, Ian Ormiston said that any de-escalation is good but more worrying is the trade situation following the G7 summit in Canada.
In volatile trading, the Japan’s Nikkei gained 0.9 percent and later settled at 0.3 percent at the close of Asian equity market trading.
On MSCI index shares rose 0.15 percent, after going in positive and negative, with South Korean shares down and Chinese shares up. The blue chip CSI 300 index jumped around 1.3 percent.
The pan-European STOXX 600 index in Europe gained 0.1 percent.
Investors Focus on Central Banks
Investors are now focusing on Federal Reserve bank in the U.S. where they are expected to raise interest rates, this will be the second rate rise this year.
Also adding to the speculation of interest rates rise is the U.S. inflation data later in the day. There is a one in five chance, according to markets that the Fed will raise rates for a fourth time this year.
European Central Bank
The European central bank are also due to hold formal talks on Thursday with policy makers deciding when they will end the bond-buying program. It is unclear if they will set a time table for now or hold off for a further six weeks.
The dollar retreated from a three week high, slipping 0.1 percent. Against the yen it climbed to 110.49.
The pound Sterling gained 0.1 percent as the parliament sat to discuss amendments to its withdrawal bill in the European Union.
U.S. crude fell 0.3 percent to $65.94 per barrel.
Brent crude slipped half a percent to $76.07.
Spot gold dipped 0.2 percent to $1,297.64 an ounce.