The threat of a global trade war sent stock markets sliding on Friday and investors rushing for the safety of currencies like the yen and government bonds, after U. S. President Donald Trump announced tariffs on up to $60 billion of Chinese goods.
LONDON (Reuters) – The threat of a global trade war sent stock markets sliding on Friday and investors rushing for the safety of currencies like the yen and government bonds, after U. S. President Donald Trump announced tariffs on up to $60 billion of Chinese goods.
Another bruising week for stocks has left global equity markets heading for their first quarterly loss since early 2016 after a spike in volatility, nervousness about rising inflation and the specter of a trade war spooked investors enjoying a multi-year bull run.
European stocks fell, with Germany’s Dax down 1.4 percent, the French CAC 40 1.3 percent lower and Britain’s FTSE 100 0.4 percent in the red.
That followed large falls in the U. S. and overnight in Asia, although futures pricing pointed to a slight recovery for U. S. stocks when they opened on Friday.
(For graphic on world stock markets, click reut.rs/2pys2pT)
Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although the measures have a 30-day consultation period before they take effect.
China urged the United States to “pull back from the brink”, but investors fear Trump’s tariffs are leading the world’s two largest economies into a trade war with potentially dire consequences for the global economy.
China disclosed its own plans on Friday to impose tariffs on up to $3 billion of U. S. imports in retaliation against U. S. tariffs on Chinese steel and aluminum products.
The MSCI World Index, down around 3.4 percent since Monday, is on course for its worst week since early February when a spike in volatility sent markets into a tailspin.
“The equity markets are getting clobbered, which is not that surprising with fears of a trade war breaking out,” said Paul Fage, a TD Securities emerging markets strategist.
