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Asian markets extend Wall Street sell off as Trump sparks trade war fears

Investors fear Trump's decision could spark retaliatory moves from major trade partners like China, Europe and neighbouring Canada in a blow to the global economy

Reuters  |  Tokyo 

Markets, Stocks, BSE, NSE, SENSEX

Stock in extended a selloff on Wall Street as investors were rattled after President announced the would impose hefty tariffs on steel and aluminium imports, raising the spectre of a global trade war.

Early on Friday, MSCI's broadest index of shares outside dipped 0.2 per cent while Japan's Nikkei tumbled 2.4 per cent.

On Wall Street, the lost 36.16 points, or 1.33 per cent, to 2,677.67 on Thursday, coming a day after the investors sold off heavily on worries the Federal Reserve might increase rates more than expected this year.

Trump said the duties of 25 per cent on steel and 10 per cent on aluminium would be formally announced next week, although officials later said some details still needed to be ironed out.

Investors fear Trump's decision could spark retaliatory moves from major trade partners like China, Europe and neighbouring Canada in a blow to the global economy.

The anxiety was underscored by Canada's quick response, with officials in Ottawa saying they will retaliate against any US tariffs on steel and

The concerns of a harmful trade war eclipsed the upbeat US economic data published on Thursday, including a rise in the to 14-year highs and another showing the number of Americans filing for unemployment benefits hitting a 48-year low.

US inflation picked up as the PCE price index, a gauge of underlying inflation, advanced 0.3 percent in January - the largest gain since January 2017. On the year, it posted an increase of 1.5 per cent, same as the previous two months.

"Even if you manufacture goods, if someone doesn't buy them, you have to scale back your production, leading to slowdown in global economic activities," said Daisuke Uno, chief strategist at

"I would expect entered another period of correction," he added.

yields fell as the risk of a trade war appeared to push aside considerations of inflation, a major theme that spooked global financial earlier this year.

The 10-year US Treasuries yield fell to 2.811 per cent, hitting its lowest level in three weeks and further extending the distance from its four-year peak of 2.957 per cent touched on Feb 21.

In the currency market, the dollar's rebound following the bullish comments on the US economy from new Federal Reserve Chair on Tuesday lost steam.

The euro jumped back to $1.2271, after having hit a seven-week low of $1.21545.

The dollar slipped to 106.12 yen , edging back towards its 15-month low of 105.545 set on Feb 16.

were also under pressure, having fallen more than one percent the previous day as Trump's trade move raised worried about the global economy.

US crude traded at $61.23 per barrel, up 0.4 percent in on Friday after having fallen to two-week low of $60.18 on Thursday. It is down 3.7 per cent so far this week.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, March 02 2018. 08:11 IST