European, US stocks rebound as trade war flares

Wednesday, May 15, 2019

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NEW YORK, United States (AFP) — Stock markets on both sides of the Atlantic rallied yesterday, paring heavy losses sparked by a raging US-China trade war over the past week.

Major US indices had lost more than two per cent on Monday after China announced retaliatory tariff measures on the United States following Washington's move last week to more than double the punitive tariffs already in place.

US President Donald Trump on Tuesday called the escalating dispute with China “a little squabble”, but said Washington was still considering extending tariffs to another US$300 billion worth of Chinese merchandise.

Still, some analysts viewed the reaction in markets on Monday as exaggerated and still expect a deal. The two sides have both said they expect further talks, and Trump says he may meet his Chinse counterpart Xi Jinping next month at a Group of 20 summit in Japan.

“Equities are attempting to claw back some lost ground,” noted analyst Chris Beauchamp at trading firm IG, “but the overall atmosphere of caution still prevails”.

On Wall Street, the Dow Jones Industrial Average climbed 0.8 per cent, winning back about one third of the Monday's loss after China's announcement of new tariffs battered stocks.

Europe's main stock markets were all higher at the close, with Paris the best performer.

Earlier Tuesday, Asian markets had plunged further in reaction to Monday's US stock plunge.

Elsewhere, oil prices advanced yesterday as traders eyed Middle East woes, “sabotage attacks” on two Saudi Arabian oil tankers, and a growing crisis in Venezuela.

On Tuesday, drone attacks claimed by Iran-aligned Yemen rebels also shut down one of Saudi Arabia's main oil pipelines.

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