Stocks hit as China trade spat roars back into life
AFTER going quiet for the best part of a week, the US- China trade spat has resumed with a bang – blasting away any Friday feeling that global stock markets were hoping to enjoy.
China targeted oil, agricultural goods and small aircraft with fresh plans to slap a 10pc tariff on £61bn of goods imports from the US.
The latest manoeuvre was a response to President Trump’s plan to impose a 10pc levy on around £245bn worth of Chinese products – though he later delayed this until December, lest American Christmas shoppers face disruption.
If you’re struggling to keep up with the tit-for-tat trade war, you aren’t alone.
Trump’s team have been quick to shrug off the fresh tariffs, claiming they knew they were in the works already and this is nothing new. And true to form, Trump took to his favourite outlet Twitter to argue that the US would be better off without China and order American firms to ‘immediately start looking for an alternative to China’. As well as pledging to respond to the tariffs later in the afternoon, he levelled a fresh insult to the chairman of the US Federal Reserve, Jay Powell, asking the world: ‘My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?’
Unsurprisingly, US stock markets fell soon after, with the Dow Jones down 2.4pc at 25,630, the tech-heavy Nasdaq down 3c at 7476 and the S&P 500 down 2.4pc at 2851. Worries that global trade will slump even further sent the price of oil back down 1.7pc to $58.82 a barrel. And the internationally exposed FTSE 100 ended the day down 0.5pc, or 33.2 points, at 7094.98. In a happier end to the week, the FTSE 250, which is more exposed to the UK and doesn’t tend to fall as much as the Footsie when global events kick off, rose 0.2pc, or 30.81 points, to 19,236.13 points.
Technology group Computacenter rose 1.8pc, or 25p, to 1424p after it promised full-year profit growth will be the best in its history. It offset slightly damper halfyear results, which showed a 2pc fall in profits from the same period in 2018, to £51m, as it counted the costs of the acquisition of US group Fusion Storm last October.
Revenues at the IT services company rose a healthy 21pc to £2.43bn. NMC Health, the United Arab Emirates-focused private hospital chain, was the biggest faller on the Footsie as its shares suffered from the ‘ what goes up, must come down’ stock market pendulum swing.
It celebrated a double-digit rally that sent shares surging by as much as 40pc at peak on Thursday after reports that investors were eyeing a stake in the company. But profit-takers cashed in yesterday, as shares fell 6.1pc, or 139p, to 2157p.
Shares in Marks & Spencer dropped as traders mulled the prospect that the High Street stalwart could fall out of the bluechip index for the first time since it listed in London 35 years ago.
M&S has been hit hard by the malaise which has swept through the retail sector, and for many years its clothing range has struggled to keep up with its food arm.
The next Footsie reshuffle takes place on September 3, giving the market plenty of time to fret until then. M&S shares closed down 2.6pc, or 5.05p, to 186.7p.
Irish building materials and cement maker CRH confirmed it will buy back another £ 318m worth of shares, sending shares up 1.6pc, or 41p, at 2644p.
And beleaguered Metro Bank, which has agreed to replace founder Vernon Hill as chairman after an accounting blip, slumped 5.5pc, or 15.6p, to 268.6p after analysts at Barclays cut the stock’s target price from 450p to 350p.