Shares hit by Trump spats and trade war
AMERICAN stock markets remained on course for their worst December since the Great Depression and global investors endured another turbulent session as the threat of a partial US government shutdown loomed, yesterday.
The Dow Jones kept falling having already lost over 10 per cent this month and the Nasdaq was nearly 2 per cent down after the UK market closed.
Wall Street’s woes, amid trade tensions with China and a hike in US interest rates despite concerns over growth prospects for the world’s biggest economy, have dented confidence this side of the Atlantic.
The FTSE 100 Index spent much of the day in the red having at one point fallen 60 points to a two-year low of 6,653, before recovering to eke out a 9-point gain to 6,721. German and French markets staged a late recovery, but Italian and Spanish shares fell.
President Donald Trump, who accused the US Federal Reserve of “yet another mistake” raising rates earlier this week, ratcheted up tensions at home by threatening a “very long” government shutdown if he failed to win approval from the Senate to fund a border wall with Mexico.
Failure to reach a deal by midnight last night would lead to some federal agencies shutting down and hundreds of thousands of workers put on leave or forced to work without pay. Craig Erlam, senior market analyst at foreign exchange company Oanda, said: “It’s looking increasingly unlikely that a late Santa surge is going to save what has been an otherwise horrible quarter.
“We’ve gone from undeterred optimism to widespread pessimism in such a short period of time and there clearly isn’t much appetite just yet to try and catch this particular falling knife. The Trump administration’s continued hardline approach with China isn’t helping matters and the prospect of a government shutdown isn’t doing the situation much good either.”
Meanwhile, official data showed that, while the UK economy grew 0.6 per cent in the third quarter, business investment fell for the third straight quarter, its worst performance since the financial crisis a decade ago.