Stocks hit by new US-China trade war salvo

Stocks fell and metals prices slumped on Wednesday as US threats of tariffs on an additional $200 billion worth of Chinese goods pushed the world’s two biggest economies closer to a full-scale trade war. US President Donald Trump’s threat overnight of 10 per cent tariffs on another $200 billion of Chinese goods dampened hopes that Washington will eventually step back from the escalating row.

The clock now starts ticking on a two-month period of public comment before the levies are imposed. Mr Trump has said he may ultimately target more than $500 billion worth of Chinese goods – roughly the total amount of US imports from China last year.

DUBLIN

The Iseq fell 44 points to 6,945 tracking other European bourses down. Shares in oil and gas company Aminex jumped 31 per cent on Wednesday afternoon after the company signed an agreement which will accelerate development of its principal asset while substantially reducing risks. It later closed 15 per cent up at just under 3 cents. Ryanair had another volatile session, closing down 0.2 per cent at €15.05 as talks aimed at averting a strike by pilots employed by airline on Thursday were considered unlikely to yield a breakthrough.

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Iseq heavyweight CRH, which has considerable operations in the US leaving it exposed to deteriorating trade relations internationally, fell 1 per cent to €30.24. AIB rose 0.7 per cent to €4.85 while rival Bank of Ireland fell marginally to €6.63.

LONDON

British shares sold off on Wednesday as the US threatened to impose 10 per cent tariffs on a list of $200 billion worth of Chinese imports, escalating a trade war and sending jitters across global markets. The blue-chip FTSE 100 index fell 1.3 per cent, snapping a four-day winning streak to decline in line with other European markets, with the biggest losses in commodities sectors.

Royal Dutch Shell and BP took the most points off the FTSE, down 2.3 per cent and 3.3 per cent, as oil prices fell with investors fearing the trade dispute could depress global economic growth and reduce energy demand.

Mining groups also weighed heavily with Rio Tinto and BHP Billiton down 2.8 and 3.1 per cent as the threat of further protectionist moves dented industrial metals prices.

Outside trade war moves, Micro Focus led FTSE fallers with an 8.9 per cent slide after the software firm reported an 8 per cent decline in revenue for the six months to end-April as the costs of integrating its acquisition of Hewlett-Packard Enterprise assets climbed.

EUROPE

European stocks fell on Wednesday as an escalation in the US-China trade dispute brought a six-session winning streak to an end. The pan-European STOXX 600 index fell 1.3 per cent, while Germany's export-heavy Dax fell 1.5 per cent. The Trump administration raised the stakes in the standoff with Beijing by threatening to impose 10 per cent tariffs on a list of $200 billion worth of Chinese imports, a move that hit risky assets globally.

With the earnings season about to get into gear, trading updates put individual stocks into focus. Shares in Indivior plunged almost a third after the drugmaker said its 2018 profit would come in below its forecast, hurt by the launch of generic versions of its bestselling opioid addiction treatment in the United States.

NEW YORK

US stocks fell on Wednesday, breaking a four-session streak of gains after Washington's threat to impose tariffs on an additional $200 billion worth of Chinese goods fanned trade war fears, while a sharp drop in oil prices hit energy shares. China responded to US President Donald Trump's threats by accusing the US of bullying and warned that it would hit back. Industrial names including Boeing, 3M and Caterpillar, which have been among the hardest hit by the recent trade dispute, were among the Dow's biggest drags. The Dow Jones Industrial Average fell 219.21 points, or 0.88 per cent, to 24,700.45, the S&P 500 lost 19.82 points, or 0.71 per cent, to 2,774.02 and the Nasdaq Composite dropped 42.59 points, or 0.55 per cent, to 7,716.61. – Additional reporting: Reuters