BCN-13, 14 Trade war fears weigh on stocks as Dow falls for 8th straight day

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ZCZC

BCN-13

WORLD-MARKETS

Trade war fears weigh on stocks as Dow falls for 8th straight day

NEW YORK, June 22, 2018 (BSS/AFP) – Global stock markets fell Thursday on
escalating trade tensions with a profit warning from Daimler tied to US-China
tariffs weighing on auto shares.

A day before the European Union was to slap retaliatory tariffs on a range
of American benchmark products, including jeans and motorbikes, analysts said
trade war fears were quickly turning into the real thing.

“We have a trade war — and it’s an escalating trade war,” SEB chief
economist Robert Bergqvist told AFP in an interview.

“Investors… are more cautious today, they are waiting for the right time
to reduce their exposure in stock markets,” he said.

Equity markets in Frankfurt and Paris fell more than one percent, while
the Dow dropped for an eighth straight session. The blue-chip US index is
composed of many companies seen as especially vulnerable to a trade war.

Automakers fell hard after luxury carmaker Daimler cut its profit
forecasts for 2018, blaming new tariffs on cars exported from the United
States to China.

The German company has major US plants that export to China. China plans
higher levies on the vehicles in retaliation for US tariffs on Chinese goods.

Daimler itself fell 4.3 percent, while German rivals Volkswagen and BMW
fell by similar margins.

US auto giants Ford and General Motors were also down, as was French
company Renault.

Oil prices, meanwhile, dropped on the eve of an output decision from the
Organization of the Petroleum Exporting Countries, the 14-nation cartel that
pumps 40 percent of global crude.

Expectations are growing that OPEC will raise its collective production
ceiling. However, Iran’s oil minister walked out of a key meeting with OPEC
peers, as a rift deepened with regional rival Saudi over its push to ramp up
the cartel’s oil output.

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BCN-14

WORLD-MARKETS 2 LAST NEW YORK
– Sterling rallies –

The British pound rallied after traders viewed a Bank of England monetary
policy meeting as boosting the odds of an interest rate hike this summer.

This time, the vote to keep rates unchanged was 6-3, with three members
voting to lift rates. Only two central bankers supported a hike at the last
meeting. “The bank kept its policies unchanged at this meeting, as expected,
but the tone of the meeting was somewhat more hawkish than expected,” said
Silvia Dall’Angelo, senior economist at Hermes Investment management.

Among individual companies, Dow member Intel dropped 2.4 percent after
Brian Krzanich resigned as chief executive over a consensual relationship
with an employee that violated a company non-fraternization policy. Chief
Financial Officer Bob Swan will serve as interim chief executive while the
company searches for a replacement.

Online retailers fell after the US Supreme Court decided US states had
broad rights to tax online sales of goods and services. Amazon fell 1.1
percent and eBay dropped 3.2 percent.

– Key figures around 2100 GMT –

New York – Dow Jones: DOWN 0.8 percent at 24,461.70 (close)

New York – S&P 500: DOWN 0.6 percent at 2,749.76 (close)

New York – Nasdaq: DOWN 0.9 percent at 7,712.95 (close)

London – FTSE 100: DOWN 0.9 percent at 7,556.44 (close)

Frankfurt – DAX 30: DOWN 1.4 percent at 12,511.91 (close)

Paris – CAC 40: DOWN 1.1 percent at 5,316.01 (close)

EURO STOXX 50: DOWN 1.1 percent at 3,403.37 (close)

Tokyo – Nikkei 225: UP 0.6 percent at 22,693.04 (close)

Hong Kong – Hang Seng: DOWN 1.4 percent at 29,296.05 (close)

Shanghai – Composite: DOWN 1.4 percent at 2,875.81 (close)

Euro/dollar: UP at $1.1607 from $1.1572 at 2100 GMT

Pound/dollar: UP at $1.3245 from $1.3172

Dollar/yen: DOWN at 109.96 yen from 110.36 yen

Oil – Brent Crude: DOWN $1.69 at $73.05 per barrel

Oil – West Texas Intermediate: DOWN 17 cents at $65.54 per barrel

BSS/AFP/HR/1005