US-China trade war: Markets feel the brunt
singapore/dubai — Global stocks tumbled on Wednesday after Beijing hit back at US plans for tariffs on $200 billion more Chinese exports, with tensions rising over the trade war between the world’s two largest economies.
France’s CAC 40 lost 1.2 per cent to 5,368 and the FTSE 100 index of British shares dropped 1.2 per cent to 7,600. Germany’s DAX sank 1.3 per cent to 12,440. US indexes are set to open lower after a stretch of gains. Dow futures lost 0.9 per cent and the broader S&P 500 futures shed 0.7 per cent.
Japan’s benchmark Nikkei 225 fell 1.2 per cent to 21,932.21 and South Korea’s Kospi lost 0.6 per cent to finish at 2,280.62. Hong Kong’s Hang Seng shed 1.3 per cent to 28,311.69. The Shanghai Composite index tumbled 1.8 per cent to 2,777.77. Australia’s S&P/ ASX 200 dropped 0.7 per cent to 6,215.60.
The US Trade Representative said Washington is preparing to impose 10 per cent tariffs on another $200 billion in Chinese imports, including 6,031 product lines ranging from burglar alarms to electric lamps and fish sticks.
“Given the magnitude and breadth of the tariff list, the impact is expected to ripple through supply chains and cause collateral damage on regional economies,” Zhu Huani of Mizuho Bank said in a commentary. However, she noted that the public consultation period allows time for more negotiations.
Electric car producer Tesla said late on Tuesday that it will build its first factory outside the United
States in Shanghai. This will make it the first wholly foreign-owned automaker in China.
Tesla is among companies hit by an additional 25 per cent in import duties, imposed by Beijing in retaliation to a tariff hike by the Trump administration.
Shares in London-based pay-TV operator Sky were up one per cent at £15.16 after 21st Century Fox increased on Wednesday its bid for the 61 per cent of the company it does not already control.
It raised its bid to £14 ($18.58) a share, which is 12 per cent higher than the last bid from rival Comcast and values Sky at £24.5 billion ($32.5 billion). The share price increase suggests some investors believe Comcast could launch a higher offer in return.
In currencies, the dollar eased to
Given the magnitude and breadth of the tariff list, the impact is expected to ripple through supply chains and cause collateral damage on regional economies Zhu Huani, Economist at Mizuho Bank
¥111.23 from ¥111.28 on Tuesday. The euro weakened to $1.1707 from $1.1745.
Gulf stock markets ended mixed on Wednesday as sentiment was hurt by a more than $2 a barrel drop in Brent crude after Trump threatened new tariffs on China.
Qatar shares, down 0.4 per cent,
and Oman’s index, one per cent lower, led the declines. But Abu Dhabi rose 0.5 per cent, and Kuwait’s premier index added 1.4 per cent, extending gains from a day earlier.
In Saudi Arabia, financials dragged the benchmark down 0.4 per cent Samba Financial Group dropped two per cent and Banque Saudi Fransi, fell 1.9 per cent. Chemical shares were hit as well.
Abu Dhabi shares were supported by First Abu Dhabi Bank, up 1.2 per cent, and etisalat, up 0.6 per cent. Abu Dhabi National Energy added 4.1 per cent despite lower oil prices. In Dubai, the index was dragged down 0.1 per cent by property share with Emaar Properties falling 2.2 per cent and Damac Properties losing one per cent.
Egypt rose 0.2 per cent to 15,952. — AP/Reuters