US-China trade setback prolongs equities’ slide

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LONDON

Global equities fell on Monday after their worst week of 2019, as hopes of an imminent US-China trade deal were crushed and neither side showed a willingness to budge, raising fears of a fresh round of tit-for-tat tariffs. The United States and China appeared at a deadlock over trade negotiations on Sunday as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any bitter fruit that harmed its interests.

Looks like we are just slowly ebbing away. More tweets from Trump over the weekend stoking the fires for a trade war, said John Woolfitt at London-based Atlantic Markets. The impasse left investors bracing for threatened retaliation by China for Washington’s tariff increase on Friday on $200 billion worth of Chinese goods. The move followed accusations by US President Donald Trump that Beijing had reneged on earlier commitments. The pan-European Stoxx 600 slipped 0.7% while S&P 500 futures shed 1.3%.

Chinese shares tumbled, with the benchmark Shanghai Composite and the blue-chip CSI 300 shedding 1.2% and 1.8%, respectively, while Hong Kong’s financial markets were closed for a holiday. Japan’s Nikkei average sank as much as 1.0% to hit its lowest level since March 28, before closing down 0.7%. How far this escalates is what the market is really worried about as we haven’t really got full details of what the U.S. will do and how China will retaliate. The important thing is what’s the impact on growth, and that’s what the market is really fearing, said Justin Oneukwusi, portfolio manager at Legal & General Investment Management.

White House economic adviser Larry Kudlow told the news channel program that China needed to agree to very strong enforcement

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