🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

GLOBAL MARKETS-World shares driven towards worst week since March by trade tensions

Published 07/09/2018, 07:07 pm
Updated 07/09/2018, 07:10 pm
© Reuters.  GLOBAL MARKETS-World shares driven towards worst week since March by trade tensions
EUR/USD
-
USD/JPY
-
AUD/USD
-
XAU/USD
-
JP225
-
JPM
-
BHP
-
DX
-
GC
-
LCO
-
CL
-
LCc1
-
STOXX
-
MSCIEF
-
MIAPJ0000PUS
-
CSI300
-
DXY
-

* Asia shares ex-Japan lowest since July last year

* Tech sector hit by drop in chip stocks, social media

* Fears new U.S. tariffs on China could come at any time

* Aussie dollar drops to lowest in over 2 years

* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh

* Asian stock markets: https://tmsnrt.rs/2C2BSt0

By Marc Jones

LONDON, Sept 7 (Reuters) - World shares limped toward their worst week in almost six months on Friday, with Asia carving out a 14-month trough as investors braced for a new salvo of Sino-U.S. tariffs.

A slump in U.S. chip stocks and reports that President Donald Trump had also weighed a trade scrap with Japan dragged on tech-heavy Asia overnight, while Europe's main bourses faded after an initial attempt push higher. .EU

A flat pan-European STOXX 600 .STOXX was set to end the week with a 2.3 percent loss, its worst weekly performance since the end of March. Emerging market stocks .MSCIEF have lost even more, some 3 percent.

Nerves were set to be frayed further after the public comment period for proposed tariffs on an additional $200 billion worth of Chinese imports passed at 0400 GMT. The tariffs could now go into effect at any moment, although there was no clear timetable.

China has warned of retaliation if Washington launches any new measures. Australia's dollar, often used in as play on China's fortunes due to its huge metals exports there, hit a 2-1/2 year low early on it Europe. /FRX

"It is all linked to the trade comment period expiring and now we are wondering what the implementation plan is going to be and how China is going to respond," Saxo Bank's head of FX strategy John Hardy said.

"The Aussie dollar of course is a proxy within G10 for that," he added, also pointing to shares in mining giants such as BHP BHP.AX trading down near key technical levels.

There were some crumbs of comfort, however, for traders.

Battered emerging market shares .MSCIEF were on course to snap a 7-day losing streak. China had closed higher overnight despite the tariff feud and Turkey's lira and South Africa's rand and Argentina's peso all looked relatively calm early on.

Chinese blue chips .CSI300 had managed their 0.5 percent bounce as beaten-down health care stocks found buyers after taking a savaging in recent months amid vaccine scandals.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had still lost 0.3 percent though, having earlier reached its lowest since mid-July last year.

The Nikkei .N225 shed 0.8 percent, undermined by a rising yen and reports U.S. President Donald Trump could be contemplating taking on Japan over trade. .T

ON THE JOBS

Other emerging markets were trying to steady after a punishing week, with Indonesia and the Philippines still badly scarred by fears of capital flight following crises in Argentina and Turkey and the rumbling U.S.-China trade strains.

"It seems unlikely the tariffs are not implemented as the U.S. administration believes that they are winning the trade war and will be in a stronger position to negotiate if they put more pressure on China," JPMorgan (NYSE:JPM) analysts wrote in a note.

"The tech sector was also very weak overnight, with a slide in Micron of almost 10 percent and further weakness in the Chinese Internet ADRs."

Eyes were also turning to the U.S. payrolls report for August which is expected to show a robust rise of 191,000, in part as July was temporarily depressed by the closure of the Toys R Us chain that month.

Still, analysts at NatWest Markets cautioned that: "Despite employment indicators pointing to another strong report, it is worth noting that there is a tendency for August payrolls to initially disappoint and then be revised up noticeably later."

Just as important will be figures on U.S. wages where a rise above the 0.2 percent forecasted would likely boost the dollar and pressure Treasury prices.

The dollar could do with the lift, having lost out to the safe-haven yen and Swiss franc. It was changing hands at 110.70 yen JPY= after falling 0.7 percent on Thursday, the sharpest one-day loss in seven weeks.

Part of the decline came after a Wall Street Journal columnist reported Trump had mused about starting a trade fight with Japan.

The dollar also hit a four-month low on the franc around $0.9645 CHF= . Against a basket of currencies, the dollar index .DXY nudged lower to 94.939 and was heading for a fourth weekly drop.

The euro was a shade higher at $1.1645 EUR= , while sterling idled at $1.2939 GBP= amid ongoing uncertainty over Brexit negotiations.

In commodity markets, the dip in the dollar left gold a sliver higher at $1,200.67 an ounce XAU= .

Crude oil was slightly up too after falling more than 1 percent on Thursday when U.S. data showed gasoline inventories rose unexpectedly last week. O/R

Brent was 20 cents higher at $76.69 a barrel LCc1 , while U.S. crude edged up 23 cents to $67.99 CLc1 .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Stocks woes

https://reut.rs/2oOILoo

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.