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GLOBAL MARKETS-U.S.-China trade dispute weighs on equity markets

Published 12/09/2018, 01:16 am
Updated 12/09/2018, 01:20 am
© Reuters.  GLOBAL MARKETS-U.S.-China trade dispute weighs on equity markets
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* Global stocks index lower amid trade war fear

* Emerging mkt shares, currencies under pressure

* Oil higher on Iran sanctions (Updates to U.S. stock market open; changes dateline, previous LONDON)

By Trevor Hunnicutt

NEW YORK, Sept 11 (Reuters) - A broad index of world stock markets edged lower on Tuesday as it struggled to maintain momentum amid lingering concerns over a trade dispute between Washington and Beijing.

MSCI's index of global equities .MIWD00000PUS inched 0.17 percent lower on the day as investors awaited action from U.S. President Donald Trump after the expiry of a deadline for public comment on additional tariffs on Chinese goods.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.13 percent.

The Dow Jones Industrial Average .DJI rose 18.22 points, or 0.07 percent, to 25,875.29, the S&P 500 .SPX gained 0.28 points, or 0.01 percent, to 2,877.41 and the Nasdaq Composite .IXIC dropped 2.09 points, or 0.03 percent, to 7,922.07. fact that Trump still hasn't announced the tariffs yet as expected has prompted a bit of cautious optimism, but it's not a problem that's going to go away," said CMC Markets analyst Michael Hewson.

Emerging markets remained under pressure, with the broad MSCI index of those countries currencies .MIEM00000CUS down near 16-month lows and the Indian rupee INR= near a record trough against the U.S. dollar.

An index of emerging market shares .MSCIEF lost 0.93 percent. Copper, heavily consumed by emerging markets, lost 1.19 percent to $5,839.50 a tonne. CMCU3

Having warned last week that he was ready to slap additional taxes on practically all Chinese imports, Trump was uncharacteristically quiet on trade on Monday.

China will respond if the United States takes any new steps on trade, the foreign ministry said on Monday, after Trump warned he was ready to slap tariffs on virtually all Chinese imports into the United States. it emerged China would ask the World Trade Organization next week for permission to impose sanctions on the United States for Washington's non-compliance with a ruling in a dispute over U.S. dumping duties that China initiated in 2013, a meeting agenda showed on Tuesday. is set to remain a recurring theme amid global trade tensions, a broadly stronger dollar and prospects of higher U.S. interest rates," said Lukman Otunuga, a research analyst at broker FXTM.

"With turmoil in Turkey and Argentina triggering contagion fears, appetite for emerging market assets and currencies is likely to continue diminishing."

Oil prices ignored the threat to demand posed by a trade war that could slow economic growth, instead taking its cue from looming U.S. sanctions against Iran's petroleum industry that could hurt supply. O/R

U.S. crude CLcv1 rose 1.67 percent to $68.67 per barrel and Brent LCOcv1 was last at $78.59, up 1.58 percent.

Spot gold XAU= dropped 0.3 percent to $1,191.95 an ounce as the dollar resumed its ascent amid the risk-off sentiment and looming U.S. interest rate increases. The dollar index .DXY rose 0.11 percent.

Bond markets, meanwhile, prepared to digest $144 billion in new supply from government auctions needed to finance U.S. deficit spending. Benchmark 10-year notes US10YT=RR last fell 9/32 in price to yield 2.9681 percent, from 2.937 percent late on Monday. World FX rates in 2018

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