Global shares slide on US-China spat


Global stock markets stumbled on Wednesday after China condemned US Senate legislation aimed at protecting human rights in Hong Kong, the latest obstacle to reaching a deal in a prolonged Sino-US trade dispute that has weighed on growth worldwide.
The MSCI gauge of stocks across the globe .MIWD00000PUS shed 0.24%, damping an equity market rally that has pushed the index up almost 20% so far this year. Germany’s DAX .GDAXI, the most trade-sensitive among Europe’s regional indexes, dropped 0.52%, halving earlier losses.
Failure to resolve the 16-month trade war has kept equity markets from further accelerating, said Rick Heckler, a partner Cherry Lane Investments in New Vernon, New Jersey. The U.S. Senate unanimously passed legislation on Tuesday aimed to protect human rights in Hong Kong amid China’s crackdown on the pro-democracy protest movement. China’s foreign ministry said the United States should stop interfering in Hong Kong and Chinese affairs.
It’s a real concern that the Chinese are angered by it (the Senate vote), and moved any resolution further away from what already has been very difficult negotiations, Heckler said. Investors are worried about a hardening of the trade war rhetoric. The United States would raise tariffs on Chinese imports if a trade deal is not reached, President Donald Trump said on Tuesday.
In Europe, the pan-regional STOXX 600 index lost 0.55% while the emerging markets index .MSCI slid 0.45%. Stocks traded mixed on Wall Street. The Dow Jones Industrial Average .DJI fell 64.68 points, or 0.23%, to 27,869.34 and the S&P 500 .SPX lost 1.83 points, or 0.06%, to 3,118.35. The NASDAQ Composite .IXIC added 5.62 points, or 0.07%, to 8,576.27.
The dollar index .DXY, tracking the unit against six major currencies, rose 0.08%, with the euro EUR= down 0.07% to $1.107. The Japanese yen JPY= weakened 0.15% versus the greenback at 108.73 per dollar.
Yields on government 10-year FR10YT=RRNL10YT=RR debt across the euro area fell 3 to 4 basis points, after trading in a narrow range the past two sessions. In Germany, the yield on the 10-year bond fell to as low as -0.384% DE10YT=RR, down 16 basis points from five-month highs hit earlier this month. Treasury note US10YT=RR rose 10/32 in price, pushing its yield down to 1.7534%.

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