World stock markets were a mixed bag yesterday as some investors fished for bargains and others gave in to anxiety over simmering trade tensions between China and the United States, dealers said.
London and Frankfurt edged higher, mirroring earlier gains in Asia, while Paris was down at the European close.
London’s FTSE 100 gained 0.3% at 7,627.40 points, Frankfurt’s DAX 30 was up 0.1% at 12,695.16 and Paris’s CAC 40: lost 0.3% to 5,372.31 at close yesterday.
Wall Street turned lower approaching midday in New York, having opened a touch higher as investors appeared to be tiring of trade war talk.
“The markets have been trading on the same piece of general trade war news for a while, as a result selling exhaustion has started to set in,” said London Capital Group analyst Jasper Lawler.
Analysts said many market players could not get themselves to believe that US President Donald Trump will take the world into an all-out trade battle.
“The trade tensions will fade somewhat in coming months either because Trump finally strikes some trade deals with China and possibly even with the big EU or because markets and businesses get used to the noise,” said Holger Schmieding at Berenberg.
“On balance, we remain cautiously optimistic that Trump will either go for deals or at least not escalate tensions further and further throughout the summer,” he said.
But analysts also warned that fresh retaliatory moves could trigger another markets dive.
“Global equity bears (sellers) could transform the current rebound into a classical dead cat bounce if trade tensions between the United States and China continue to escalate,” predicted Lukman Otunuga, at FXTM.
Equities had tanked Tuesday on rising fears of a trade war after US President Donald Trump threatened fresh tariffs on Chinese imports and Beijing warned of countermeasures.
In a new twist, a top EU official revealed that Brussels will implement tomorrow a raft of retaliatory tariffs against metals duties imposed by Trump.
From blue jeans to motorbikes and whiskey, the EU’s hit-list of products targeted for tariffs with the US reads like a series of emblematic American exports.
Brussels first drew up the list in March when Trump initially floated the 25% tariffs on steel imports and 10% on aluminium, which also target Canada, Mexico and other close allies.
Canada and Mexico have also announced their own countermeasures.
Beijing warned it would retaliate in kind to Trump’s threat of additional tariffs on hundreds of billions of dollars’ worth of Chinese goods, amounting to much of its exports to the US.
The standoff follows weeks of fruitless talks between the world’s two biggest economies, with the White House accusing China of a string of unfair practices including cyber-theft and forced technology transfers that are hurting American jobs and companies.
Eyes are turning to Opec’s crucial meeting as Saudi Arabia pushes, along with non-member Russia, to ease an output ceiling that has supported oil prices for 18 months.
The two major producers are facing stiff opposition at the June 22-23 gathering from nations that have benefited from the resulting higher revenues.
“It does seem like an increase (in output) is coming,” said analyst Greg McKenna at AxiTrader. “The question is, can such a move be achieved in order to balance the interests of Opec’s customers like the US and India while still holding the cartel together as a functioning group?”


Related Story