Trade war fears shake equities
hong kong — World stock markets posted steep declines on Friday, adding to global losses after United States President Donald Trump vowed to impose stiff steel and aluminium tariffs, sparking fears of a trade war.
In Europe, Germany’s DAX fell 2.2 per cent to 11,917 while the CAC 40 in France fell 1.9 per cent to 5,161. The FTSE 100 index of leading British shares was 1 per cent lower at 7,101.
US stocks were poised for further losses at the bell with Dow futures and the broader S&P 500 futures down 1 per cent.
Japan’s benchmark Nikkei 225 lost 2.2 per cent to close at 21,181.64 points and South Korea’s Kospi slid one per cent to end at 2,402.16 points.
Hong Kong’s Hang Seng shed 1.5 per cent to 30,583.45 points and the Shanghai Composite in mainland China fell 0.6 per cent to 3,254.53 points.
Australia’s S&P/ASX 200 sank 0.7 per cent to 5,929.90 points. Benchmarks in Taiwan and Southeast Asia also lost ground.
Tariff trouble
In his latest move to follow through on campaign promises of an “America First” trade policy, Trump told industry executives he planned to levy penalties of 25 per cent on imported steel and 10 per cent on aluminium imports. He said the tariffs would be in place for “a long period of time,” though it wasn’t immediately clear if certain trading partners would be exempt.
The comments renewed investor concerns that increasingly nationalistic governments will impose barriers hurting the global economy and trade.
“Markets are clearly concerned that Trump’s move to impose tariffs will spark retaliation from other countries or trade blocs, which could be the start of a trade war,” analysts Bas van Geffen and Elwin de Groot of Rabobank wrote in a commentary.
Also on investors’ radar is next week’s annual session of China’s National People’s Congress. The meeting of the rubber-stamp parliament’s 3,000-plus delegates is mainly ceremonial but China’s Communist leaders use it to publicise new initiatives and set the tone for the year’s development plans. Investors will be looking to see whether Beijing brings in painful reforms to curb surging debt and overhaul state industry while widening the economy to private competitors.
Other risk events for the markets include elections and central bank meetings. Italians go to the polls on Sunday in a vote in which the main contenders include parties supporting anti-European, anti-immigration and populist positions. Policymakers at central banks in Europe, Australia, Canada and Japan are set to hold scheduled meetings, though no big changes are expected. —