World shares slide after US-China trade dispute escalates

World shares slide after US-China trade dispute escalates
The Associated Press

HONG KONG (AP) — World stock markets slid Wednesday after China announced details of its plans to retaliate against the proposed U.S. tariff hikes, in a escalation of trade tensions between the world’s two biggest economies.

KEEPING SCORE: European markets sank in early trading. Germany’s DAX fell 1.1 percent to 11,867.14 and France’s CAC 40 shed 0.4 percent to 5,130.70. Britain’s FTSE 100 lost 0.4 percent to 7,001.65. Wall Street was poised for a big sell-off, with Dow futures tumbling 1.8 percent to 23,557.00. Broader S&P 500 futures slumped 1.5 percent to 2,575.00.

ASIAN SCORECARD: Japan’s benchmark Nikkei 225 crept 0.1 percent higher to end at 21,319.55 but South Korea’s Kospi slid 1.4 percent to 2,408.06 as the won weakened from the 3 ½ year high it touched against the dollar earlier this week, motivating foreign investors to take profits. The Shanghai Composite slipped 0.2 percent to 3,131.11 and Australia’s S&P/ASX 200 edged 0.2 percent higher to 5,761.40. Hong Kong’s Hang Seng slumped 2.2 percent to 29,518.69 with the decline accelerating in the final minutes of trading after Beijing announced specifics of its tariff hikes. Shares also fell in Singapore, Thailand, Philippines, Indonesia and India.

TARIFF TENSIONS: Beijing and Washington detailed plans to hike tariffs on a broad swath of imported goods from each other, in a series of rapid fire announcements over less than 24 hours that ratcheted up tensions over their trade dispute. China issued a $50 billion list of more than 100 U.S. goods including soybeans and aircraft targeted for a possible 25 percent tariff hike, releasing it after trading ended in most Asian markets. Beijing was responding to an announcement hours earlier by President Donald Trump’s administration outlining proposed tariffs on 1,300 imported Chinese products, including industrial robots and telecoms gear, to protest Beijing’s alleged theft of U.S. technology. China’s envoy to the WTO said Beijing would challenge the U.S. moves. The Chinese Commerce Ministry said the date the tariff hikes take effect depends on whether the U.S. actually moves to raise its duties.

INVESTOR INSIGHT: “We’re in for waves and waves and waves of bad news in the trade war front,” said Stephen Innes, trader at OANDA. “I think now what they’re clearly signaling is ‘You hit us, we’ll hit you,” he said, adding that investors were fleeing to the yen and gold, which are traditionally seen as havens from risk.

WALL STREET: Major U.S. benchmarks ended higher after a late rally. The S&P 500 index rose 1.3 percent to 2,614.45. It dropped 2.2 percent a day earlier. The Dow Jones industrial average rose 1.6 percent to 24,033.36. The Nasdaq composite climbed 1 percent to 6,941.28.

CURRENCIES: The dollar slipped to 106.14 yen from 106.62 yen in late trading Tuesday. The euro rose to $1.2294 from $1.2272.

ENERGY: Oil’s rally fizzled. A barrel of U.S. crude lost $1.23 to $62.26 in electronic trading on the New York Mercantile Exchange. The contract gained 50 cents to settle at $63.51 on Tuesday. Brent crude, used to price international oils, fell $1.31 to $66.81 a barrel in London.

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