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EUROPE-MARKETS
European stock markets rebound on tariff talks hope
LONDON, Sept 19, 2018 (BSS/AFP) – Stock markets took the latest escalation
in the trade war between the world’s top two economies in their stride on
Tuesday.
European stocks only briefly turned lower after China retaliated to the
latest US sanctions, while Wall Street opened higher, as analysts viewed
Beijing’s reaction as being moderate and measured.
China announced Tuesday tariffs on US goods worth $60 billion in
retaliation for President Donald Trump’s decision the previous day to slap
duties on $200 billion in Chinese products next week.
“If the United States insists on raising tariffs even more, China will
respond accordingly,” the finance ministry said in a statement.
Monday’s volley of tariffs from the White House will see $200 billion
worth of goods taxed at 10 percent from September 24, going up to 25 percent
from January 1 if the two sides are unable to hammer out a deal.
Trump warned also that another $267 billion in tariffs has been lined up
if Beijing retaliates.
But Beijing went ahead anyway and announced the new tariffs.
While European markets briefly dropped, they rebounded after Wall Street
opened higher, as traders took a sanguine view of the developments.
“The more lenient approach from President Trump last night and a measured
reaction from Beijing has left traders a little on the optimistic side,” said
market analyst David Madden at CMC Markets UK.
“It is almost as if a hurdle has been cleared and investors have one less
thing to worry about in the near-term,” he added.
London gave up its gains, but Paris closed 0.3 percent higher and
Frankfurt rose by 0.5 percent.
The Dow was up 0.5 percent in late morning trade.
Fawad Razaqzada at Forex.com called China’s latest move “measured and not
over-aggressive” as the tariff rates it applied were less than it had
previously indicated.
“So it looks like China has blinked first, and this puts the US government
in a great position to agree on a new trade deal,” added Razaqzada.
Consumer tech giant Apple was spared in this round of tariffs, which
excluded smartwatches and Bluetooth devices. Apple’s shares were up 0.8
percent in late morning trading.
“There were investors who’d been thinking a 25 percent tariff in one go is
a possibility,” Shogo Maekawa, a global market strategist with JPMorgan Asset
Management, said.
“It could be considered something good in this realm of bad things.”
BSS/AFP/HR/1010