Broader US-China spat fears lower global stocks

Investors run for safety in bondsInvestors run for safety from broader US-China spat threat

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LONDON/TOKYO

Global stocks were slightly lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the US-China spat after reports Washington has another Chinese tech firm in its sights. Relief over Washington’s temporary relaxation of curbs against China’s Huawei Technologies evaporated after reports that the White House is considering further sanctions on Chinese video surveillance firm Hikvision.

Fears of another blacklisting reinforced worries that US President Donald Trump is looking beyond sealing a trade deal with China to a potentially bigger battle aimed at curbing Beijing’s technology ambitions. I think the debate is just starting about what the implications of all this could be if it escalates. It’s my biggest concern, said Simon Webber, lead portfolio manager on the global & international equities team at Schroders.

The limits which were imposed on Huawei last week and eased on Monday had sent shivers through global semiconductor stocks as investors worried about disruption to suppliers of the world’s No. 2 smartphone maker. If we get retaliation, if we start deconstructing supply chains, if we get countries asking whether they can rely on products and services overseas, then we’ll have much more uncertainty and a much more worrying environment, said Webber.

MSCI world equity index, which tracks shares in 47 countries, was down slightly at 0905 GMT, as investors shunned assets considered risky in times of economic and political strife

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