Stocks slump on trade fears
A sell-off in Asian stocks spilled over into European equities and U.S. futures on Thursday as the Trump administration’s latest threats to free trade rattled markets. The dollar climbed and bonds were mixed with central bank policy high on the agenda.
The Stoxx Europe 600 Index dropped for a second day, tracking sharp declines in China and Hong Kong share indexes which were triggered by the American president asking his trade representative to consider hiking tariffs on $200 billion worth of Chinese goods as early as next month. Beijing responded that it was ready to retaliate. In Europe, Germany’s Dax led regional declines as automakers sank.
Markets are coming under pressure as higher U.S. tariffs on Chinese goods look increasingly likely, with President Trump asking his trade representative to consider raising proposed levies on $200 billion in imports to 25 percent from 10 percent. The latest phase of the protectionist saga overshadowed an upbeat message on the American economy from the Federal Reserve.
The Stoxx Europe 600 Index dipped 0.9 percent as of 10:46 a.m. London time, the lowest in more than a week. Futures on the S&P 500 Index declined 0.6 percent to the lowest in three weeks. The MSCI AllCountry World Index dipped 0.6 percent to the lowest in almost two weeks. The MSCI Asia Pacific Index sank 1.3 percent to the lowest in almost two weeks. The Shanghai Composite Index sank 2 percent to the lowest in almost four weeks. Germany’s DAX Index sank 1.8 percent to the lowest in almost three weeks.
Elsewhere, oil steadied around a two-week low after a surprise gain in American crude inventories exacerbated supply concerns. Gold rose and copper extended a decline. Emerging-market currencies sold off, with South Africa’s rand dropping. Turkey’s lira fell to a record as the U.S. imposed sanctions on its NATO ally over the imprisonment of an American pastor.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.