Global stock markets fell for a second day Tuesday amid jitters about US-China trade tensions and mounting public scrutiny of technology companies.
China responded to President Donald Trump’s tariffs with their own tariffs, which analysts said is stoking fears of a trade war, news outlets reported.
China is implementing new tariffs on meat, fruit and other products from the US as retaliation for American duties. Beijing's latest move, announced by its finance ministry in a statement dated April 1, is direct retaliation against taxes approved by Trump on imported steel (25%) and aluminum (10%). Chinese officials had been warning over the last few weeks that their country would take action against the US. The tariffs begin on Monday, the finance ministry statement said.
China's Customs Tariff Commission is increasing the tariff rate on pork products and aluminum scrap by 25%. It's also imposing a new 15% tariff on 120 other imported US commodities, from almonds to apples and berries. All told, the extra tariffs will hit 128 various kinds of US products, multiple outlets reported.
Most markets in Asia fell after a sharp drop the day before in New York. European stocks were down less than 1% in morning trading, suggesting that Wall Street’s painful Monday would not turn into a global rout. Underlining that point, futures that track major United States stock indexes were modestly higher in European trading on Tuesday, meaning that many investors see a better day coming.
Market benchmarks in London, Frankfurt, Shanghai and Tokyo all declined. The dollar sank against the euro and yen but rebounded later against the Japanese currency, AP reported.
In early trading, Germany’s DAX fell 1% to 11,973.02 and London’s FTSE 100 declined 0.7% to 7,010.39. France’s CAC 40 lost 0.6% to 5,138.36.
In Asia, the Shanghai Composite Index lost 0.8% to 3,163.63 and Toyko’s Nikkei 225 shed 0.4% to 21,292.29. Sydney’s S&P-ASX 200 declined 0.1% to 5,751.90.
Hong Kong’s Hang Seng spent most of the day in negative territory but recovered to end up 0.2% at 30,137.49.
Wall Street Plunges
Wall Street plummeted 3% Monday after a possible trade war between the world's two biggest economies. The threat of a trade war sparked panic and fear through American markets—sending indexes into free fall.
The Dow was down 715 points, or 3%, to 23,387.18. The SP lost 81 points, or 3.1%, to 2,559, while the Nasdaq was off 3.5% to 6, 816—losing 247 points.
Tech stocks led the market declines. Shares of Amazon dipped 5.5% after Trump continued to criticize the e-commerce giant.
Amazon, Facebook, Intel, Microsoft and Tesla were among the major contributors to Monday’s stock slump on Wall Street. Amazon faces pressure from President Trump, while Facebook continues to grapple with privacy concerns and Tesla has been hit by a succession of negative headlines.
Tech shares were among the worst performers in other markets too, like China, Hong Kong and Japan. But the world’s biggest technology companies primarily trade in the United States.
China is home to digital giants like the Alibaba Group, an online retailer. But many Chinese technology companies, like Alibaba, trade in the United States as a way to reach global investors. Alibaba shares joined the American tech rout on Monday, falling more than 3%, while shares of the Chinese search company Baidu fell more than 1%.
Shares of BMW, Daimler and Volkswagen still fell Tuesday morning. All three depend heavily on sales in Asia and would suffer from any economic turmoil there.
Middle East Stocks Fall
Saudi stocks opened lower on Tuesday, dropping for the fourth straight session, as the index continued to lose momentum after gaining sharply ahead of FTSE Russell’s decision last week to upgrade the bourse to emerging market status.
The Saudi index was down 0.2% in late morning trade, dragged down by petrochemicals and financials. Yanbu National Petrochemicals dropped 1.3% while Banque Saudi Fransi was down 0.6%.
Other Persian Gulf markets were flat to lower with the Qatari index dropping 0.8%, hurt by weakness in blue chips following gains on recent days on the back of moves by top companies to increase foreign ownership ceilings. Industries Qatar was down 0.8% and Qatar National Bank fell 0.5%.
The Dubai index was flat but Emaar Properties remained weak amid concern about the sluggish outlook for the local real estate market. Emaar was down 0.5%.
Abu Dhabi’s index was down 0.2%. Waha Capital fell 5.5% after going ex-dividend.
