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World stocks struggle as trade fears persist
LONDON, July 5, 2018 (BSS/AFP) – Global stock markets faltered Wednesday
as China-US trade tensions simmered ahead of the introduction of new tariffs.
Key European equity indices London and Frankfurt were lower at the close,
after a downbeat session in Asia, while Paris managed to eke out tiny gains.
Market volumes were subdued with Wall Street shut for the Independence Day
holiday.
“European markets have struggled… hit by further China worries,” noted
analyst Chris Beauchamp at trading firm IG.
In Asia, Shanghai stocks twisted lower before US President Donald Trump’s
new tariffs kick in on Friday.
The US is due to begin enforcing tariffs on more than $30 billion (25.8
billion euros) in Chinese imports as retribution for what Washington
describes as Beijing’s theft of American technology and other unfair trade
practices.
Beijing has vowed to respond with its own tariffs immediately, which Trump
has said will invite far steeper US counter-measures, potentially covering
another $400 billion in Chinese goods.
“There remain worries about the impact of a possible US-China trade war on
both the Chinese economy with potential fall out across the wider Asian
region,” said City Index analyst Fiona Cincotta.
US authorities have meanwhile blocked a seven-year application from China
Mobile to enter the domestic market, citing national security concerns.
However, in a contrasting development, Washington has temporarily allowed
Chinese telecoms company ZTE to resume some activities.
– China concern –
Concerns remain for the Shanghai stock market, which is down more than 20
percent from its January high on concerns about a slowing Chinese economy.
The yuan is also under pressure, though it levelled after a rally on
comments from central bank chief Yi Gang, who pledged to keep the exchange
rate stable and avoid using the currency as a weapon in any trade war.
Oil prices diverged, after earlier climbing on the prospect of tumbling
Iranian crude exports in the face of new US sanctions.
Saudi Arabia has said it is prepared to boost supply to balance the
market, but traders are also weighing factors like Libyan supply disruption
and rising UD demand.
BSS/AFP/HR/1015