European stocks slide as US-China trade tensions simmer

European stocks slide as US-China trade tensions simmer

FILE PHOTO: Pedestrians leave and enter the London Stock Exchange. (REUTERS/Neil Hall)
LONDON: European stock markets tumbled on Wednesday (Aug 1) after US President Donald Trump reportedly raised the stakes in a global trade war with China, dealers said.London stocks dived by over one percent, hit also by weak manufacturing data on the eve of a likely UK interest rate hike, while Frankfurt and Paris showed smaller losses at the closing bell.
Wall Street gave up early gains to trade unchanged approaching midday in New York, with Dow member Apple's shares surging following a stronger-than-expected earnings report.In a mixed Asia session, Shanghai and Hong Kong both lost ground, despite overnight Wall Street gains."European stock markets are largely lower as fears about global trade have crept back into traders' psyches," said CMC Markets UK analyst David Madden.'SENSE OF CONFUSION'
"Tensions between the US and China have risen after President Trump threatened to slap a higher tariff on US$200 billion worth of Chinese imports," Madden said."This is seen as a move by Mr Trump to put pressure on Beijing."Trump is now considering a 25 per cent tariff on US$200 billion in Chinese imports, rather than the 10 per cent previously touted, reports said on Tuesday.Contradicting reports surrounding the state of US-China trade relations were creating "a sense of confusion across markets, while also possibly desensitising investors towards global trade developments", said Lukman Otunuga, an analyst at FXTM.
This was weighing on "risk appetite", he said.The US imposed tariffs of 25 per cent on US$34 billion of Chinese products earlier this month, with plans to add another US$16 billion of imports on Tuesday.Trump initially threatened to levy 10 per cent on an additional US$200 billion but that figure may now rise to 25 per cent, sources told the Washington Post and Bloomberg."The Trump administration has decided to use another aggressive tactic to bring China on the negotiating table," noted ThinkMarkets analyst Naeem Aslam.In Beijing meanwhile, Chinese foreign ministry spokesman Geng Shuang said Wednesday that "blackmail and pressure from the US side will never work on China".BOE RATE HIKE?The latest developments mark a major ramping up of pressure over Washington's trade standoff with Beijing."Yesterday's optimism over progression on US-China talks has fallen short, as China calls out US President Donald Trump for attempting to blackmail the Chinese with threats of further tariffs," added IG analyst Joshua Mahony.Back in London on Wednesday, the capital's benchmark FTSE 100 index sank on weak manufacturing data and disappointing company earnings on the eve of a likely interest rate hike.The Bank of England is widely expected on Thursday to hike interest rates to combat stubbornly high inflation, as it also eyes potential fallout from both Brexit and the global trade war, economists said.Policymakers are forecast to increase the British central bank's main interest rate by a quarter-point to 0.75 per cent - which would be the highest level for more than nine years.Key figures at 1535 GMT:London - FTSE 100: DOWN 1.2 per cent at 7,652.91 points (close)Frankfurt - DAX 30: DOWN 0.5 per cent at 12,737.05 (close)Paris - CAC 40: DOWN 0.2 per cent at 5,498.37 (close)EURO STOXX 50: DOWN 0.5 per cent at 3,509.21New York - Dow Jones: FLAT at 25,416.04Tokyo - Nikkei 225: UP 0.9 per cent at 22,746.70 (close)Hong Kong - Hang Seng: DOWN 0.9 per cent at 28,340.74 (close)Shanghai - Composite: DOWN 1.8 pe cent at 2,824.53 (close)Euro/dollar: DOWN at US$1.1669 from US1.1691 at 2100 GMTPound/dollar: DOWN at US$1.3119 from US$1.3124Dollar/yen: DOWN at 111.85 yen from 111.86 yenOil - Brent Crude: DOWN US$1.67 at US$72.64 per barrelOil - West Texas Intermediate: DOWN US$1.02 at US$67.74 per barrel  
Source: AFP/de
 Source : https://www.channelnewsasia.com/news/business/european-stocks-slide-as-us-china-trade-tensions-simmer-10581438