World equities made an attempt at recovery yesterday, with investors trying to focus on positive economic news rather than the prospect of a debilitating global trade war.
A fall in weekly jobless claims in the US served as a reminder that the world’s biggest economy is humming along nicely, while the appointment of a new White House economic advisor brought a modicum of stability, analysts said.
“Global equities are positive into the back end of the week, with some welcome certainty from the Trump administration after the hiring of Larry Kudlow as new top economic strategist,” said Michael van Dulken at Accendo, a move that helped the dollar recover and gave a fillip to European markets.
London’s FTSE 100 closed 0.1% up at 7,139.76 points, Frankfurt’s DAX 30 ended 0.9% up at 12,345.56 points and Paris’ CAC 40 gained 0.7% at 5,267.26 points, while the EURO STOXX 50 finished trading 0.7% higher at 3,414.13 points.
But investors remained on tenterhooks while concerns grew over a possible trade war sparked by Trump’s “America first” protectionist policies.
“The global markets remain wobbly as global trade concerns fester,” the Charles Schwab brokerage said in a note.
Trump’s decision to levy sanctions on Russia for alleged election-meddling also gave investors pause.
“Markets are digesting the implications of a US-led trade war and further sanctions against Russia,” said Jasper Lawler, head of research at London Capital Group.
Adding to the unease has been Trump’s sacking this week of secretary of state Rex Tillerson, one of the few moderates in the US administration.
Analysts said there is now a growing fear that the White House has set itself on a more hardline course, which could upend global trade as well as impact on key geopolitical issues, particularly the Iran nuclear deal.
Trump is “cleaning house with the establishment picks and putting like-minded thinkers around him”, said Greg McKenna, chief market strategist at AxiTrader.
The president’s “growing confidence means he is emboldened to prosecute his ‘America First’ agenda. That means there is a real risk that a trade war actually breaks out”, McKenna added. “That ultimately can’t be good for growth.”
In London Unilever shares fell after the company announced it was moving its headquarters to the Netherlands, a move widely seen as a response to Britain’s imminent pullout from the European Union.
Bitcoin sank to its lowest level since the start of February — after Google said it will ban adverts for cryptocurrencies and initial coin offerings.
Visitors walk past an illuminated rotating cube displaying share price information in the atrium of the London Stock Exchange Group offices. London’s FTSE 100 closed 0.1% up at 7,139.76 points yesterday.
