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EUROPE-STOCKS-MARKETS
Global stocks listless as trade war looms
LONDON, June 21, 2018 (BSS/AFP) – World stock markets were a mixed bag
Wednesday as some investors fished for bargains and others gave in to anxiety
over simmering trade tensions between China and the United States, dealers
said.
London and Frankfurt edged higher, mirroring earlier gains in Asia, while
Paris was down at the European close.
Wall Street turned lower approaching midday in New York, having opened a
touch higher as investors appeared to be tiring of trade war talk.
“The markets have been trading on the same piece of general trade war news
for a while, as a result selling exhaustion has started to set in,” said
London Capital Group analyst Jasper Lawler.
– ‘Used to the noise?’ –
Analysts said many market players could not get themselves to believe that
US President Donald Trump will take the world into an all-out trade battle.
“The trade tensions will fade somewhat in coming months either because
Trump finally strikes some trade deals with China and possibly even with the
big EU or because markets and businesses get used to the noise,” said Holger
Schmieding at Berenberg.
“On balance, we remain cautiously optimistic that Trump will either go for
deals or at least not escalate tensions further and further throughout the
summer,” he said.
But analysts also warned that fresh retaliatory moves could trigger
another markets dive.
“Global equity bears (sellers) could transform the current rebound into a
classical dead cat bounce if trade tensions between the United States and
China continue to escalate,” predicted Lukman Otunuga, at FXTM.
Equities had tanked Tuesday on rising fears of a trade war after US
President Donald Trump threatened fresh tariffs on Chinese imports and
Beijing warned of countermeasures.
– New twist –
In a new twist, a top EU official revealed that Brussels will implement
Friday a raft of retaliatory tariffs against metals duties imposed by Trump.
From blue jeans to motorbikes and whiskey, the EU’s hit-list of products
targeted for tariffs with the US reads like a series of emblematic American
exports.
Brussels first drew up the list in March when Trump initially floated the
25 percent tariffs on steel imports and 10 percent on aluminium, which also
target Canada, Mexico and other close allies.
Canada and Mexico have also announced their own countermeasures.
Beijing warned it would retaliate in kind to Trump’s threat of additional
tariffs on hundreds of billions of dollars’ worth of Chinese goods, amounting
to much of its exports to the US.
The standoff follows weeks of fruitless talks between the world’s two
biggest economies, with the White House accusing China of a string of unfair
practices including cyber-theft and forced technology transfers that are
hurting American jobs and companies.
– OPEC focus –
Eyes are turning to OPEC’s crucial meeting as Saudi Arabia pushes, along
with non-member Russia, to ease an output ceiling that has supported oil
prices for 18 months.
The two major producers are facing stiff opposition at the June 22-23
gathering from nations that have benefited from the resulting higher
revenues.
“It does seem like an increase (in output) is coming,” said analyst Greg
McKenna at AxiTrader. “The question is, can such a move be achieved in order
to balance the interests of OPEC’s customers like the US and India while
still holding the cartel together as a functioning group?”
BSS/AFP/HR/1020