+ A
A -
Reuters
LONDON
Stock markets weakened on Monday as concerns mounted about an escalating fallout from a US crackdown on China’s Huawei Technologies.
Investors already on edge about an escalating US-China trade dispute were further rattled after Beijing accused Washington of harboring “extravagant expectations” for a trade deal, underlining the gulf between the two sides.
Asian shares had managed to reverse some of last week’s losses on Monday after Washington said it would lift tariffs in North America, and as investors cheered apparent wins by Conservative incumbent parties in elections in Australia and India.
But the mood did not carry over to Europe, where weak corporate earnings added to the gloom.
The pan-European Euro STOXX 600 extended earlier losses and was down 1.06 percent by 1100 GMT - the index, down 3.5 percent in May, is on track for its first monthly loss in 2019.
The German DAX slid 1.38 percent, while France’s CAC 40 weakened 1.39 percent.
US President Donald Trump’s government added Huawei to a trade blacklist last week, imposing restrictions that will make it difficult to do business with US companies.
The repercussions quickly became evident as Google suspended some business with Huawei.
In Europe, chipmakers Infineon Technologies, AMS and STMicroelectronics dropped sharply, falling between 6 percent and 12 percent on growing fears of a disruption to the industry’s global supply chain.
“Market volatility continues to stem from announcements and interpretations of what is going on in trade disputes between the US and its trading partners, but principally China,” said Jasper Lawler, head of research at London Capital Group.
“China are unlikely to take Google’s suspension of business with Huawei lying down.”
On the positive side, a US decision on Friday to remove tariffs on Canadian steel and aluminum prompted Canada’s foreign minister to vow the quick ratification of a new North American trade agreement.
The MSCI index of world shares, which tracks shares in 47 countries, slipped 0.14 percent, leaving it 3.9 percent below its 2019 highs. The sudden return of trade war jitters has sent the stock market’s year-to-date rally into reverse.
US S&P 500 e-mini futures dropped 0.51 percent.
Prominent investor Jim Rogers, who co-founded the Quantum Fund with George Soros, told the Reuters Global Markets Forum that he believed Washington and Beijing would soon announce a trade deal, although the current spat would not be the last time Trump tried to exploit the prospect of a trade war.
“These are negotiating tactics from Trump at the moment. What will happen is we will have some good news, the market will have a rally. It will probably be the last rally,” he said.
LONDON
Stock markets weakened on Monday as concerns mounted about an escalating fallout from a US crackdown on China’s Huawei Technologies.
Investors already on edge about an escalating US-China trade dispute were further rattled after Beijing accused Washington of harboring “extravagant expectations” for a trade deal, underlining the gulf between the two sides.
Asian shares had managed to reverse some of last week’s losses on Monday after Washington said it would lift tariffs in North America, and as investors cheered apparent wins by Conservative incumbent parties in elections in Australia and India.
But the mood did not carry over to Europe, where weak corporate earnings added to the gloom.
The pan-European Euro STOXX 600 extended earlier losses and was down 1.06 percent by 1100 GMT - the index, down 3.5 percent in May, is on track for its first monthly loss in 2019.
The German DAX slid 1.38 percent, while France’s CAC 40 weakened 1.39 percent.
US President Donald Trump’s government added Huawei to a trade blacklist last week, imposing restrictions that will make it difficult to do business with US companies.
The repercussions quickly became evident as Google suspended some business with Huawei.
In Europe, chipmakers Infineon Technologies, AMS and STMicroelectronics dropped sharply, falling between 6 percent and 12 percent on growing fears of a disruption to the industry’s global supply chain.
“Market volatility continues to stem from announcements and interpretations of what is going on in trade disputes between the US and its trading partners, but principally China,” said Jasper Lawler, head of research at London Capital Group.
“China are unlikely to take Google’s suspension of business with Huawei lying down.”
On the positive side, a US decision on Friday to remove tariffs on Canadian steel and aluminum prompted Canada’s foreign minister to vow the quick ratification of a new North American trade agreement.
The MSCI index of world shares, which tracks shares in 47 countries, slipped 0.14 percent, leaving it 3.9 percent below its 2019 highs. The sudden return of trade war jitters has sent the stock market’s year-to-date rally into reverse.
US S&P 500 e-mini futures dropped 0.51 percent.
Prominent investor Jim Rogers, who co-founded the Quantum Fund with George Soros, told the Reuters Global Markets Forum that he believed Washington and Beijing would soon announce a trade deal, although the current spat would not be the last time Trump tried to exploit the prospect of a trade war.
“These are negotiating tactics from Trump at the moment. What will happen is we will have some good news, the market will have a rally. It will probably be the last rally,” he said.
