London (AFP) – Global stock markets struggled for direction on Friday as they sought to hold onto weekly gains fueled by the China-US trade war hiatus. Equity markets have enjoyed one of their best weeks since US President Donald Trump’s “Liberation Day” tariff bazooka last month caused indices to slump.
“The chief driver of global markets this week has been improving US trade relations, especially with China,” said Kathleen Brooks, research director at XTB. “However, as we end the week, this is fading,” she added. The United States and China on Monday announced they would slash their tit-for-tat tariffs for 90 days to allow for talks, but considerable levies remain in place.
Investors are now awaiting signals from the US president on progress in trade talks, as countries seek deals to avoid his steeper levies, as well as more information about their economic impact. Analysts warn that initial optimism over the US-China trade truce may have been overdone given that tariffs remain in place and pose a threat to economic growth. A “baseline” 10-percent tariff on US imports of goods from nearly every country remains in place.
“Even if more trade deals are announced, it is still the case that tariffs on goods entering the US will be much higher than anyone dared to contemplate,” said IG chief market analyst Chris Beauchamp. Analysts and investors worry that higher prices will lead to economic growth slowing. April US inflation data released this week came in lower than expected, although analysts said the impact of tariffs is more likely to be visible in May or June data.
Top US retailer Walmart warned Thursday that it will begin raising prices soon due to the tariffs. Preliminary data showed US consumer confidence dipped in May, but the snapshot was taken before the US-China tariff pause was announced. US consumer sentiment is now down nearly 30 percent from the start of the year, with trade policy dominating the thinking of consumers, as nearly three-quarters spontaneously mentioned tariffs, researchers at the University of Michigan said.
Oil prices rebounded after tumbling Thursday on the possibility of a breakthrough in Iran nuclear talks, fueled by Trump saying progress had been made on a deal. The uptick rode resurgent concern over India-Pakistan tensions. The dollar rose against major rival currencies as investors weigh whether the Federal Reserve will still cut interest rates this year following mixed inflation data.
Shares in Danish drugmaker Novo Nordisk, known for its blockbuster diabetes and weight-loss treatments Ozempic and Wegovy, dropped more than three percent after it announced the departure of its chief executive, before cutting losses. Novo Nordisk’s share price has fallen by more than half since June 2024 as it faces more competition. E-commerce titan Alibaba shed over six percent in Hong Kong after reporting a disappointing rise in first-quarter revenue amid sluggish consumer spending in China.
– Key figures at around 1530 GMT –
New York – Dow: UP less than 0.1 percent at 42,348.77 points
New York – S&P 500: UP 0.2 percent at 5,422.09
New York – Nasdaq Composite: UP less than 0.1 percent at 19,121.22
London – FTSE 100: UP 0.6 percent at 8,684.56 (close)
Paris – CAC 40: UP 0.4 percent at 7,886.69 (close)
Frankfurt – DAX: UP 0.3 percent at 23,767.43 (close)
Tokyo – Nikkei 225: FLAT at 37,753.72 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 23,345.05 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,367.46 (close)
Euro/dollar: DOWN at $1.1143 from $1.1185 on Thursday
Pound/dollar: DOWN at $1.3258 from $1.3304
Dollar/yen: UP at 145.99 yen from 145.65 yen
Euro/pound: DOWN at 84.05 from 84.07 pence
Brent North Sea Crude: UP 0.8 percent at $65.02 per barrel
West Texas Intermediate: UP 0.8 percent at $61.62 per barrel.
burs-rl/rmb
© 2024 AFP
