Trump trade war bat­ters global stock mar­kets

Scottish Daily Mail - - City&finance - by James Salmon

NEARLY £32bn was wiped off the value of the UK’s big­gest firms af­ter Don­ald Trump crushed hopes of an im­mi­nent trade deal with China and threat­ened to slap swinge­ing tar­iffs on France.

The FTSE 100 plunged to its low­est level since late Oc­to­ber af­ter the US Pres­i­dent said there was little prospect of a US-China deal be­ing made un­til af­ter the pres­i­den­tial elec­tion next year.

In­vestors were also un­nerved by the prospect of an es­ca­lat­ing trade war be­tween the US and the EU as the Trump ad­min­is­tra­tion threat­ened to impose £1.8bn of tar­iffs on French goods, from champagne to cheese.

Lon­don’s blue-chip in­dex, which pre­dom­i­nantly con­sists of firms ply­ing most of their busi­ness over­seas, fell 1.7pc, or 127.18 points, to 7158.76, hav­ing slumped as low as 7135 at one stage dur­ing the day.

Trad­ing screens were red in Wall Street too, where the Dow Jones In­dus­trial Av­er­age was 1.4pc lower by the time mar­kets had closed in Lon­don.

The French Cac 40 fin­ished 1pc lower, although the Dax in Ger­many eked out a slight gain, clos­ing 0.2pc higher.

The US is pre­par­ing to impose tar­iffs of up to 100pc on dozens of French ex­ports, also in­clud­ing make-up, home­ware and kitchen­ware. It comes in re­tal­i­a­tion against a new ‘dig­i­tal ser­vices tax’ on in­ter­net gi­ants in­clud­ing Google, Ama­zon and Face­book.

But an­a­lysts said that it was the de­lay of a trade deal with China which was prin­ci­pally to blame for send­ing shock waves through fi­nan­cial mar­kets.

Michael Hew­son, chief an­a­lyst at CMC Mar­kets, said: ‘The prospect of putting off any deal has com­pletely up­ended mar­ket ex­pec­ta­tions that we were potentiall­y mil­lime­tres away from a deal, and also flies in the face of the op­ti­mism that has seen mar­kets rally strongly over the past few weeks.’

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