World markets slide on trade war fears

london — World stock markets slumped on Friday before a Group of Seven summit that could see world leaders clash with US President Donald Trump over his latest tariff moves.

European stock indices were down across the board following a slump in Asia — and after a week of largely strong gains in the wake of robust US jobs data and easing political headwinds in Italy and Spain.

London’s benchmark FTSE 100 index was down 0.7 per cent in Friday morning deals.

In the eurozone, Frankfurt’s DAX 30 tumbled 1.2 per cent, hit also by data showing that industrial production in Germany unexpectedly fell in April, adding to fears of a slowdown in Europe’s powerhouse economy.

The Paris CAC 40 meanwhile lost 0.4 per cent, Milan shed 1.8 per cent and Madrid dropped 1.0 per cent.

“After ignoring the trade tensions for as long as they could, a rocky Asian session has left the European indices feeling rather tender,” noted Connor Campbell, financial analyst at Spreadex traders.

“A likely feisty G7 meeting in Quebec appears to be the main thing driving the markets lower. Investors are either worried that nothing will get resolved, or Trump will become more entrenched in his aggressive approach to trade,” he added.

In Asia on Friday, Japan’s Nikkei stocks index ended 0.6 per cent lower with dealers unmoved by news confirming Japan’s economy shrank for the first time in two years in January-March.

Hong Kong sank 1.8 per cent after a six-day winning run and

Shanghai slipped 1.4 per cent despite forecast-beating Chinese trade data.

As leaders arrive for the G7 meeting, there is talk that Trump could expect some harsh words after he imposed tariffs on steel and aluminium from Canada, Mexico and the European Union.

The move has led to retaliatory measures and sparked fears of a global trade war.

“Usually (the G7 summit is) a non-event for markets but with all the focus on escalating trade tensions amongst long-standing allies, there’s a good reason for investors to be chary as this

meeting is unlikely to follow an orderly arrangement of discussion,” said Stephen Innes, Oanda’s head of Asia-Pacific trade.

“Even more so as Canada and Mexico have retaliated against a range of US exports and the EU has promised to do so as well.” —