Equities subdued as US and China exchange tariff blows
seoul— Global markets were mixed on Friday as the US and China slapped each other with tariffs, with investors monitoring the rhetoric for signs of a further escalation in the trade dispute.
European stock markets edged down after modest gains in Asia. Britain’s FTSE 100 fell 0.2 per cent to 7,586 while France’s CAC 40 was flat at 5,364. Germany’s DAX gained less than 0.1 per cent to 12,472. Futures augured small losses on Wall Street. S&P futures were down 0.2 per cent while Dow futures fell 0.3 per cent.
Asian markets erased earlier losses to finish mostly higher as the uncertainty ended over whether Washington would escalate tensions with Beijing. Upbeat economic data and overnight gains on US stock markets helped temper concerns, though trading volume was light.
After falling as much as nearly one per cent, China’s Shanghai Composite Index finished 0.5 per cent higher at 2,747.23. The Shanghai benchmark had languished recently, losing more than 12 per cent over the past two weeks.
Hong Kong’s Hang Seng index gained 0.5 per cent to 28,315.62, while South Korea’s Kospi added 0.7 per cent to 2,272.87. But markets in Taiwan, Singapore and other Southeast Asian countries were lower.
Tokyo’s Nikkei 225 jumped 1.1 per cent to 21,788.13 in what appeared to be a technical rebound
after a four-day losing streak. Australia’s S&P-ASX 200 rose 0.9 per cent to 6,272.30.
“The market actually is acting very calmly,” said Francis Lun,
chief executive of GEO Securities Ltd in Hong Kong. “But of course, the talk of a trade war already depressed the market for about 1,000 points in the past month already.”
As of Friday, the US imposed a 25 per cent tariff on $34 billion worth of Chinese imports.
China said it would have to make a “necessary counterattack” but gave no details. It has been expected to strike back with tariffs on a similar amount of US exports including soybeans.
“The Trump administrations trade war is finally upon us,” said Stephen Innes, Asia-Pacific head of trading at OANDA. “If this moves off the tit-for-tat battleground into a full out trade war, it will not only threaten market stability but could compromise relations between Washington and Beijing.”