European Shares May See Gap-down Start As Trade Tensions EscalateMay 10, 2019
European stocks may see a gap-down opening on Monday after U.S. President Donald Trump vowed to hike tariffs on China and the Wall Street Journal said that China is considering canceling trade talks with the United States this week.
Trump tweeted on Sunday that talks toward a trade deal with China were proceeding “too slowly”, and that he would raise tariffs on USD 200 billion of goods to 25 percent on Friday from 10 percent.
Trump also added that he would target a further USD 325 billion of Chinese goods with 25 percent tariffs “shortly.
Asian stocks plunged, oil prices tumbled by more than 2 percent and safe-haven assets such as the Japanese yen and gold strengthened as trade negotiations between China and the U.S. deteriorated.
China’s Shanghai Composite index plunged nearly 6 percent while Hong Kong’s Hang Seng index was down more than 3 percent.
U.S. stocks rallied on Friday as investors cheered a solid jobs report as well as surprisingly good earnings from a slew of companies.
The Dow rose 0.8 percent and the S&P 500 gained 1 percent while the tech-heavy Nasdaq Composite surged 1.6 percent to reach a fresh record closing high.
European markets ended higher on Friday as investors reacted positively to earnings updates from banks and upbeat U.S. jobs data.
The pan European Stoxx 600 gained 0.4 percent. The German DAX advanced 0.6 percent, France’s CAC 40 index inched up 0.2 percent and the U.K.’s FTSE 100 added 0.4 percent.
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