World shares retreat as US-China tensions rise

Published July 25, 2020
In this file photo visitors look at a stock quotation board at Tokyo Stock Exchange in Tokyo Japan. — Reuters
In this file photo visitors look at a stock quotation board at Tokyo Stock Exchange in Tokyo Japan. — Reuters

LONDON: Global equities took a beating Friday as China-US tensions intensified, while stalled stimulus talks in Washington fuelled fears for the economy, traders said.

Lingering worries about the impact on businesses of fresh coronavirus outbreaks helped trigger major profit-taking, overshadowing a batch of bright data in Europe.

“It’s a sour end to the trading week,” said AJ Bell investment director Russ Mould.

The Dow was down nearly 140 points approaching midday in New York, “adding to yesterday’s declines in morning action as friction between the US and China heated up overnight”, said Charles Schwab analysts.

European indices were up to two percent lower at the close.

Earlier in Asia, Shanghai and Hong Kong had already dived as relations between the world’s two superpowers took another bad turn when China ordered the closure of the US consulate in Chengdu in retaliation for America shuttering Beijing’s diplomatic mission in Houston this week.

The standoff is the latest in a string of issues — including Hong Kong, coronavirus and Huawei — that have plunged relations between the superpowers into crisis.

Stock markets were also still reeling from Thursday’s report of a rise in new jobless claims in the US which prompted doubts about any ongoing economic rebound there, traders reported.

Hopes that the data would spur US lawmakers to push on with fresh stimulus measures were undermined by the inability of Republicans and the White House to agree on a $1.0 trillion stimulus proposal.

Haven asset gold meanwhile jumped within spitting distance of $1,900 for the first time since late 2011, boosted by economic uncertainty, geopolitical tensions and Federal Reserve monetary easing that has weakened the dollar.

Oil attempted to stage a rebound having tanked Thursday, but then investors lost heart, overwhelmed by demand worries, and pushed crude lower again.

Published in Dawn, July 25th, 2020

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Budget and politics
Updated 14 Jun, 2024

Budget and politics

PML-N, scared of taking bold steps lest it loses whatever little public support it has, has left its traditional support — traders — virtually untouched.
New talks?
14 Jun, 2024

New talks?

WILL this prove another false start, or may we expect a more sincere effort this time? Reference is made to the...
A non-starter
14 Jun, 2024

A non-starter

WHILE the UN Security Council had earlier this week adopted a US-backed resolution calling for a ceasefire in Gaza...
Budget for stabilisation
Updated 13 Jun, 2024

Budget for stabilisation

The proposed steps lack any “disruptive policy changes", especially to "right-size" the govt, and doubts remain on authorities' ability to enforce new measures.
State of the economy
13 Jun, 2024

State of the economy

THE current fiscal year is but another year lost. Going by the new Pakistan Economic Survey, which maps the state of...
Unyielding onslaught
Updated 13 Jun, 2024

Unyielding onslaught

SEVEN soldiers paid the ultimate price in Lakki Marwat on Sunday when their vehicle was blown up in an IED attack,...