LONDON: Equities and oil prices extended a global rout for markets on Friday ( Apr 4 ) after China hit back over President Donald Trump’s tariff blitz with its own mammoth levy on United States goods, inflaming global trade war fears.
The money was steadier against major competitors having fallen strongly on Thursday on fears of a downturn in the US.
” Sentiment is so delicate right now,” Chris Beauchamp, general industry analyst at online trading system IG, told AFP.
” Investors are strongly in the’get me to money now’ phase, on fears that other countries may follow China’s lead, and of course that the US president will react to China’s taxes with even more costs.
” This trade war is like everything we’ve seen for years, perhaps years,” Beauchamp added.
Frankfurt’s major DAX index of European blue-chip businesses plunged more than 5 per cent times after the Chinese government said it would hit 34 per cent taxes on all exports of US products from Apr 10.
Paris tumbled 4. 2 per cent and London gave up 3. 9 per cent in early afternoon deals.
Oil futures plummeted around 7 per cent, having already plunged about 6. 5 per cent on Thursday on the prospect of weaker demand.
News that OPEC had unexpectedly hiked crude supply more than planned added to the steep selling.
The price of traded copper- a vital component for energy storage, electric vehicles, solar panels and wind turbines- tumbled more than 5 per cent.
Beijing on Friday also imposed export controls on seven rare earth elements, its commerce ministry said, including gadolinium- commonly used in MRIs- and yttrium, utilised in consumer electronics.
” Another jolt of fear has shot through markets as China’s threat of retaliation has materialised,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
” The big concern is that this is a sign of a sharp escalation of the tariff war which will have major implications for the global economy. “