Equities tumble after Wall Street sell-off over trade deal confusion
beijing — Global stock prices tumbled Wednesday after Wall Street plunged amid confusion about what Washington and Beijing agreed to in a tariff cease-fire.
In early trading, London’s FTSE 100 index fell 1.3 per cent to 6,932.04 and German’s DAX lost 1.1 per cent to 11.207.49. France’s CAC 40 retreated 1.2 per cent to 4,951.74. On Tuesday, the DAX lost 1.1 per cent, the CAC 40 shed 0.8 per cent and the FTSE 100 slid 0.6 per cent. On Wall Street, the future for the Standard & Poor’s 500 index was up 0.45 per cent and that for the Dow Jones Industrial Average gained 0.25 per cent.
Hong Kong’s Hang Seng index fell 1.6 per cent to 26,819.58 and the Shanghai Composite Index declined 0.6 per cent to 2,649.81. Tokyo’s Nikkei 225 lost 0.5 per cent to 21,919.33 and Sydney’s S&PASX 200 shed 0.8 per cent to 5,668.40. Seoul’s Kospi gave up 0.8 per cent to 2,101.31 and India’s Sensex was 0.6 per cent lower at 35,902.74.
Benchmarks in Taiwan, New Zealand and Southeast Asia also retreated.
Investor confidence in the US-China agreement faltered after confusing and conflicting comments from President Donald Trump and some senior officials. That revived fears the disagreement between the world’s two biggest economies could slow global growth. The Standard & Poor’s 500 slid 3.2 per cent to 2,700.06. The Dow Jones Industrial Average lost 3.1 per cent to 25,027.07. The Nasdaq composite lost 3.8 per cent to 7,158.43.
The Trump administration raised doubts about the substance of a US-China trade cease-fire. That revived fears their tariff battle could chill global economic growth. Trump previously said the agreement in Buenos Aires would lead to sales of American farm goods and cuts in Chinese auto tariffs, but Beijing has yet to confirm that.
Trump renewed threats of tariff hikes on Tuesday, saying on Twitter that Washington would have a “real deal” with China or else would charge “major tariffs” on Chinese goods. That made the weekend agreement seem even less likely to produce a long-lasting settlement.
Markets got jolt from remarks by the president of the Fed’s New York regional bank. During a briefing with reporters, John Williams said given his outlook for strong economic growth, he expects “further gradual increases in interest rates will best sponsor a sustained economic expansion.”
That seemed to counter Fed Chairman Jay Powell’s remarks last week.
The jitters helped drive demand for government bonds. The yield on the 10-year Treasury note fell to 2.91 per cent from 2.99 per cent late Monday, a large move. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks.
The dollar gained to 112.96 yen from Wednesday’s 112.78 yen. The euro fell to $1.1339 from $1.1343. —