Shoppers walk at West LA Farmer's Market in Santa Monica, California on Sunday. AFP
Global stock markets fell on Monday after US President Donald Trump sparked fears of a renewed trade war with China over its role in the coronavirus pandemic.
From the outset, European equities kicked lower on simmering US-China tensions with Frankfurt and Paris playing catch-up with London after a long holiday weekend.
The region’s losses came despite millions of Europeans emerging from lockdown on Monday, with hardest-hit Italy leading the way out of its two-month coronavirus confinement.
Asian stocks also dipped into negative territory, tracking pre-weekend falls on Wall Street as investors returned from an extended weekend break to send Hong Kong stocks down 4.2 percent, although Shanghai and Tokyo remained shut.
Oil prices declined from last week’s surge while the US dollar was on the front foot against the European single currency.
“Risk sentiment is very fragile as we enter another critical week in terms of economic and corporate data. Tail risks are rising and Donald Trump’s attacks on China are really not helping,” Swissquote Bank analyst Ipek Ozkardeskaya told AFP.
“Equities in Europe opened sharply lower, as expected. Losses in the FTSE were less than the rest of the European continent, but the investor mood points at further losses throughout the session.” Trump had hinted he could impose new tariffs on China over its handling of the virus outbreak, claiming he had seen evidence linking a Wuhan lab to the contagion.
The claim, repeated by US Secretary of State Mike Pompeo, overshadowed a further slowdown in the number of infections and deaths from COVID-19.
It also comes as Trump faces a tough fight to be re-elected in November with the economy slumping and millions of Americans losing their jobs because of the virus crisis.
“President Trump is back beating the trade war drums... and increasing the odds of a significant volatility risk event as all roads lead back to trade and tariff,” said AxiCorp’s Stephen Innes.
He added that “while the market is already factoring in a less globalised world during the initial phase of the post-pandemic recovery as economies internalise, rekindling a dormant US-China trade war will likely make any economic improvement exponentially more difficult. And ripping up the trade agreement will trigger a global equity market rout.”
The equity losses on Monday came after all three main indexes on Wall Street dived by between 2.6 and 3.2 percent on Friday, having enjoyed their best month in decades in April.
Oil prices dropped after surging last week as top producers began to ease up on the pumps as part of a deal agreed last month to slash output by 10 million barrels a day.
Gold prices rose on Monday as US President Donald Trump’s threat to impose tariffs on China over the coronavirus crisis overshadowed optimism about economies easing lockdown measures, driving investors away from riskier assets. Spot gold was up 0.3% at $1,703.95 per ounce by 1113 GMT.
US gold futures rose 0.8% to $1,714.30.”We have a risk-off environment in financial markets today,” Julius Baer analyst Carsten Menke said.
“The tensions which are building related to the outbreak of coronavirus are just another example of this ceremonial tussle between the U.S. and China,” he said, adding that the rising tensions between the two could turn out to be positive for gold. European stock markets and oil prices fell as the spat between top US officials and China over the origin of the coronavirus fuelled fears of a new trade war.
Gold prices jumped more than 1% on Friday, recovering from a near two-week low after Trump threatened to impose tariffs on China as he considers ways to retaliate for the spread of the coronavirus out of Wuhan, China.
Adding to that, Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the new coronavirus emerged from a Chinese laboratory but did not dispute US intelligence agencies’ conclusion that it was not man-made. “Overall gold is clearly performing its safe haven asset role in a market where volatility remains high and the next bear movement for stocks could be just around the corner if the virus comes back with a second wave,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.
More than 3.52 million people have been infected by the coronavirus, and central banks and governments around the world have announced massive fiscal and monetary measures to limit economic damage caused by the virus outbreak.
Esper's comments come at a time when some US officials have blamed China for the coronavirus outbreak. Secretary of State Mike Pompeo said on Sunday Washington had evidence the disease emerged from a Chinese lab, which Beijing strongly denies.
They also talked about beating the COVID-19 pandemic, combating climate change and working together to hold those responsible for the coup in Myanmar, the White House said in a statement on Wednesday.
The daily number of new coronavirus infections in France stayed above 20,000 on average for the fourth straight day on Tuesday, while hospitalisations reached an eight-week high of 27,041.
Foreign ministry spokesperson Wang Wenbin’s comments follow the denial of a bail request in California for a university researcher accused of lying about her ties to China’s military and governing Communist Party to gain access to the United States.
The World Bank’s new president Ajay Banga on Friday asked the lender’s 16,000 staff to “double down” on development and climate efforts as he seeks to accelerate the bank’s
The UAE’s economic growth is expected to remain robust, averaging 4.6 percent from 2022 to 2024, driven by higher oil prices and improved business confidence,
The Ministry of Industry and Advanced Technology (MoIAT) has signed a Memorandum of Understanding (MoU) with Mashreq, one of the leading financial institutions in the UAE,