Stock markets mostly fell yesterday, as fears intensified over the escalating global trade war, analysts said.
In Europe, London’s FTSE 100 was down 0.1% at 7,683.97, Frankfurt’s DAX 30 lost 0.6% to 12,686.29 and Paris’s CAC 40 shed 0.6% to 5,417.07 at close yesterday.
The dollar rose across the board, with the pound slumping under $1.30 for the first time in 10 months as weak UK retail sales data dented the chances of an interest rate hike from the Bank of England in August, experts added.
“A drop in retail sales has sent the pound sharply lower, continuing the general trend of the week,” noted Chris Beauchamp, market analyst at IG trading group.
Across the Atlantic, Wall Street stocks fell, with several companies tumbling after earnings.
But Comcast and Walt Disney Co gained over 3% each, as Comcast said it was pulling out of the bidding war with Disney for film and television operations of Rupert Murdoch’s 21st Century Fox and would focus on acquiring the European TV operator Sky.
On the macroeconomic front, the markets were still mulling Federal Reserve chairman Jerome Powell’s warning that the spiralling global trade war was having a negative impact on companies in the US.
President Donald Trump has imposed steep tariffs on products from China worth tens of billions of dollars, and has threatened to target hundreds of billions more, on top of import taxes on steel and aluminium that have angered allies including the EU.
The Fed chief said US businesses were already being hurt by reciprocal tariffs on key products, pointing out: “The bottom line is a more protectionist economy is less competitive, less productive.”
He also said that if Trump’s trade policy ultimately resulted in lower tariffs, that could be good for the US economy.
For now, however, analysts fear that any further tariffs could put a dent in a trend of buoyant global economic growth – and cause a headache for US businesses.
“Increased trade tensions have raised the risk that new measures may be taken that would have a much greater impact on global economic growth than those enacted so far,” Fitch Ratings analysts said in a note.
“So far the scale of tariffs imposed has been too small to materially affect our forecasts for world growth,” they wrote.
“However, further measures mooted by the US would mark a significant escalation,” they added, warning that in the worst-case scenario, supply chains could be disrupted, consumers’ wages could fall and job creation could be hit.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Al Khaliji wins big at European Magazine awards
Aamal to focus on industrial, trading sectors, says CEO
QNB signs agreement with Turkish firm to offer real estate consultancy services
Significant potential for further growth in Qatar’s insurance industry: OBG
China’s top leaders cautiously optimistic about economy
US gas export clout set to grow with new LNG approvals
Indian refiners turn to Opec, Mexico, US to make up Iran oil gap
Iran crude oil buyers stay on the sidelines as waiver decision looms
IMF slates unpredictable policies in report Tanzania blocked