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7 July, 2018 00:00 00 AM
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Asian stocks climb despite first trade war shots

AFP
Asian stocks climb despite 
first trade war shots
Commuters head to work in Beijing's central business district in the morning yesterday. The US is set to begin enforcing tariffs on more than 34 billion USD in Chinese imports from July 6, with Beijing vowing to respond with its own tariffs immediately. AFP Photo

Asian stocks rebounded yesterday despite the introduction of US tariffs on $34 billion in Chinese goods in what Beijing called the “largest trade war” in economic history, reports AFP from Hong Kong.

Beijing said it had already imposed retaliatory measures on US goods without immediately providing precise details.

But analysts said the news had been expected for weeks and therefore many traders took the opportunity to buy into markets that have been under pressure over growing global trade spats.

Tokyo stocks led the gains, closing 1.1 per cent higher, with markets in Shanghai and Hong Kong up by around half a percentage point.

Li Daxiao, analyst at Yingda Securities, said news of the tariffs was already priced into the market.

“After the US tariffs announcement, the negative news finally came out and has already been digested over recent weeks. Therefore investors are not in as much of a panic as before, and the market sentiment will reverse,” said Li.

Stanley Chik, from Bright Smart Securities International in Hong Kong, said that “the impact of tariffs on economic growth appears limited for now, giving the market a breathing spell.”

But these could be just the first skirmishes in a trade war between the world’s top two economies, with financial markets worried about a knock-on effect on the wider global economy and the broader trading system.

Trump has threatened to impose tariffs on some $450 billion of Chinese goods—virtually all of China’s exports to the US—as he seeks to advance his “America First” protectionist agenda.

Beijing has accused the US of “firing on the whole world” with the measures, pointing out that most of the Chinese goods under attack are made by companies with large foreign investment—including American.

In the US and Europe traders were cheered by comments from the US ambassador in Berlin, who on Thursday told bosses of Germany’s biggest car firms that Washington was calling on the EU to bring tariffs to zero on car imports—in exchange for equal treatment by the US.

This drove European car stocks sharply higher and dragged up wider markets.

Europe opened in the black on Friday, with London’s benchmark FTSE 100 index gaining 0.3 percent.

In the eurozone, Frankfurt won 0.3 per cent and Paris added 0.4 percent.

In New York, traders had returned Thursday from the July 4 holiday in a relatively bullish mood, pushing the Dow Jones index up nearly one per cent as they cheered solid US employment data.

Auto giants led the gains—buoyed by the headlines from Berlin—and tech stocks like Google parent company Alphabet and Facebook were also higher.

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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