Asian, European stocks slide again
> Wall Street bounces back from sell-off but markets still gripped by Trump-related jitters
LONDON: European and Asian stocks slid yesterday on fears that a growing crisis surrounding US President Donald Trump could lead to his impeachment and shatter any chances of his economy-boosting agenda being implemented.
However, US stocks recovered from Wednesday’s sharp sell-off in morning trading yesterday.
Meanwhile, the dollar recovered from a six-month low versus the euro, and clawed back ground against the yen, but not against the pound which was boosted by strong British retail sales. Earlier, the greenback sank below ¥111 for the first time since end-April.
“European equities are now fully entangled in the Trump-related sell-off. Yesterday (Wednesday) the US market bore the brunt of the move but now it has gone global,” said David Madden, analyst at traders CMC Markets UK.
“Trump Dump!!,” tweeted Mati Greenspan, senior markets analyst at eToro.
Frankfurt ended down 0.3% and Paris 0.5%. London underperformed its peers, falling 0.9%, as the strengthening pound weighed on exporters.
On Wall Street, the Dow was up 0.3% in late morning trading.
Analyst Chris Beauchamp at online trading firm IG said a US “bounceback was eminently predictable, especially since there have been no further developments in Trumpland”.
“The rally is small, and in no way really changes the bearish picture that was created yesterday (Wednesday) – once options expire and the weekend is out of the way there is a high probability that the selling will resume.”
Global equities had already slumped Wednesday, with the Dow losing 1.8% and Frankfurt shedding 1.4%.
Investors tracked the heaviest losses in New York since Trump was elected, following claims by recently fired FBI boss James Comey that the president pressed him to drop a probe into exnational security adviser Michael Flynn’s links to Moscow.
That came a day after it was reported Trump had divulged classified information to Russia’s foreign minister, fanning further allegations about his own ties to the country’s leaders.
While the tycoon says he will be exonerated by a newly appointed special prosecutor who will look into the claims, analysts said the uncertainty is rocking markets globally.
There is a growing fear that Trump’s plans for tax cuts, big spending and redtape slashing – which had fuelled a global equities and dollar rally following his November election win – will be thrown off course.
Earlier, Asian equities sank with Tokyo plunging 1.3%, with investors brushing off data showing Japan’s economy posted another quarterly rise in growth, marking its longest expansion in more than a decade.
Hong Kong shed 0.6%, Sydney fell 0.8%, Seoul was 0.3% off and Singapore also gave up 0.3%. Shanghai lost 0.5% and Taipei 0.4%. – AFP