Stocks fall as US threaten more tariffs

- ASSOCIATED PRESS, SINGAPORE

Sep 11, 2018-

European and Asian markets were mostly lower on Monday after US President Donald Trump suggested placing tariffs on an additional $267 billion in Chinese goods in a tit-for-tat dispute over trade. But a strong US jobs report primed Wall Street for a higher open.

In Europe, France’s CAC 40 was almost flat in early trading at 5,251.38, while the FTSE 100 index of leading British shares gained 0.2 percent to 7,291.25. Germany’s DAX fell 0.1 percent to 11,950.66. US indexes are set for a positive open. Dow futures added 0.3 percent to 26,029.00. The broader S&P 500 futures was 0.3 percent higher at 2,884.20.

Japan’s benchmark Nikkei 225 climbed 0.3 percent to 22,373.09 after the country’s gross domestic product surpassed expectations by growing at a 3 percent annual rate in the April-June quarter. The Kospi in South Korea gained 0.3 percent to 2,288.66. Hong Kong’s Hang Seng index tumbled 1.3 percent to 26,613.42. The Shanghai Composite index gave up 1.2 percent to 2,669.48. Australia’s S&P/ASX 200 was less than 0.1 percent lower at 6,141.70. Shares fell in Taiwan and across Southeast Asia.

On Friday, Trump told reporters on Air Force One that the potential tariffs, which would essentially hit every product imported from China, were “ready to go on short notice if I want.” Such a step would significantly escalate his trade war with Beijing and would likely increase costs for a broad range of US businesses and consumers. The Trump administration is already poised to slap tariffs on $200 billion worth of goods from China, such as handbags and bicycle tires. The US has already imposed tariffs on $50 billion in Chinese products, for which Beijing has retaliated with an equal amount of import taxes on US goods.

The pace of hiring in the US quickened in August and wages grew at their fastest pace in nine years. The economy added a strong 201,000 jobs and the unemployment rate stayed at 3.9 percent, near an 18-year low, the government said Friday in its monthly jobs report. The data point to a job market that remains resilient after nearly a decade of economic growth, and even with tariffs and counter-tariffs on imports and exports looming over US employers that rely on global trade.

“Dark clouds continue to gather on markets with the latest threats regarding further tariffs on Chinese goods dominating sentiment, making for a weak start to the week,” Jingyi Pan of IG said in a commentary. “With any updates detailing the implementation based on President Donald Trump’s suggestion, that would most certainly be negative for equity markets, one to watch in the week,” she said.

Benchmark US crude added 75 cents to $68.50 a barrel. The contract lost 2 cents to settle at $67.75 per barrel in New York. Brent crude, used to price international oils, gained $1.06 to $77.89 a barrel. It rose 33 cents to $76.83 a barrel in London on Friday.

The dollar was flat at 111.06 yen. The euro rose to $1.1570 from $1.1566. The Indian rupee fell to a fresh low of 72.67 to the dollar on Monday afternoon before recovering slightly to 72.29, battered by rising crude oil prices, a widening current account deficit and the strengthening dollar. The rupee closed Friday at 71.74 per dollar.

Published: 11-09-2018 08:08

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