Global Stocks Lower on Trade War Fears 07/18 05:51
Global stock markets followed Wall Street lower Thursday after President
Donald Trump said he could impose more tariffs on Chinese goods and Japan's
BEIJING (AP) -- Global stock markets followed Wall Street lower Thursday
after President Donald Trump said he could impose more tariffs on Chinese goods
and Japan's exports tumbled.
Benchmarks in London, Frankfurt, Shanghai and Tokyo all declined.
Trump alarmed investors by saying he had $325 billion of Chinese imports
available for additional tariffs "if we want." That shook markets that had been
reassured by Trump's June agreement with Chinese President Xi Jinping to resume
The Chinese government warned tariff hikes would "create a new obstacle" in
talks on ending their bruising fight over Beijing's technology ambitions.
Trump's comment "cast a dark cloud over lingering concerns on trade talk
progress," Mizuho bank analysts said in a report.
In early trading, London's FTSE 100 fell 0.6% to 7489.52 and Frankfurt's DAX
declined 0.9% to 12,232.74. France's CAC-40 lost 0.6% to 5539.39.
On Wall Street, futures for the Standard & Poor's 500 index and the Dow
Jones Industrial Average were down 0.3%.
In Asia, the Shanghai Composite Index lost 1% to 2,901.18 and Tokyo's Nikkei
225 tumbled 1.9% to 21,046.24. Hong Kong's Hang Seng retreated 0.5% to
28,438.99 and Seoul's Kospi was 0.3% lower at 2,066.55. India's Sensex lost
0.4% to 39050.29.
Sydney's S&P-ASX 200 shed 0.4% to 6,649.10. Taiwan and New Zealand gained
while Southeast Asian markets were mixed.
Japan reported June exports declined 6.8% from a year earlier. Imports fell
5.2%. For the first six months of this year, Japanese exports slipped 4.7%
while imports edged 1.1% lower.
"Continued weak global production and cautious approaches to fixed
investment will likely weigh on Japan's exports over the near term," Harumi
Taguchi of IHS Markit said in a report.
The South Korean central bank cut its benchmark rate for a one-year loan by
0.25 percentage points to 1.5%. It was the first reduction since 2016.
The Bank of Korea cut its 2019 economic growth forecast by 0.3 percentage
points to 2.2%.
Even that might be "somewhat optimistic," said Ma Tieying of DBS Group. She
wrote in a report that weak global demand, a trade dispute with Japan and
U.S.-Chinese tensions "pose challenges" for this year's growth.
On Wednesday, U.S. stocks fell for a second day as railway operator CSX had
its biggest drop in 11 years and pulled down other industrial companies. CSX
plunged 10.3% after saying it expects this year's revenue to decline as much as
2%, after previously saying it expected growth.
The S&P 500 fell 0.7% and the Dow lost 0.4%. The Nasdaq composite retreated
Banks fell due to worries lower interest rates will hurt profits. Investors
expect the Federal Reserve to cut rates for the first time in a decade at their
next policy meeting in two weeks.
Corporate earnings reports are getting into full swing this week, and
investors have been mostly cautious in their assessments of them. Earnings are
still expected to decline for S&P 500 companies in the second quarter.
ENERGY: Benchmark U.S. crude lost 21 cents to $56.57 per barrel in
electronic trading on the New York Mercantile Exchange. The contract fell 84
cents on Wednesday to close at $56.78. Brent crude, used to price international
oils, lost 9 cents to $63.57 in London. It lost 69 cents the previous session
CURRENCY: The dollar declined to 107.72 yen from Wednesday's 107.98 yen. The
euro gained to $1.1240 from $1.1226.