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POST TIME: 8 July, 2018 00:00 00 AM
Global stocks mostly rise even as US-China trade war gets real
AFP

Global stocks mostly rise even as US-China trade war gets real

Global stock markets advanced Friday, overcoming earlier wobbles prompted by China and the United States firing opening salvos in a trade war that pits the world’s two biggest economies against each other. AFP PHOTO

Global stock markets advanced Friday, overcoming earlier wobbles prompted by China and the United States firing opening salvos in a trade war that pits the world’s two biggest economies against each other, reports AFP from New York.

Wall Street gained on the back of a solid US employment report that was strong enough to reassure investors of the health of the economy, but did not exhibit robust enough wage growth to suggest the Federal Reserve will need to raise interest rates more aggressively.

All three major US indices ended higher, with the Nasdaq chalking up its second straight gain of more than one percent.

European markets finished modestly higher, even as trade worries remained investors the biggest concern, dealers said.

US President Donald Trump on Friday rolled out 25 per cent tariffs on $34 billion of Chinese goods in what Beijing called the “largest trade war” in economic history.

China said it was hitting back with retaliatory measures on US goods but did not immediately providing precise details on what products would be targeted in the first wave.

“Trump is bringing the world close to a genuine trade war,” said Holger Schmieding, chief economist at Berenberg.

But in the end, European and US markets followed the example of Asian markets which gained as investors went bargain-hunting, dealers reported.

Tokyo stocks led the gains in Asia, 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 had already been priced in.

“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,” Li said.

Stanley Chik, from Bright Smart Securities International in Hong Kong, said “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 long war, 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 as much $450 billion annual Chinese imports—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—includ