INSUBCONTINENT EXCLUSIVE:
LONDON:
Worldstocks came under pressure
on Thursday as new
tariffs took effect in the
U.
S./
China trade war and markets speculated
about US President Donald
Trump's position following legal rulings against two former advisers.
The MSCIworld equity index, which tracks
shares in 47 countries, was 0.1 per cent lower by 0822 GMT, while a rise across defensive sectors helped Europe's STOXX 600 eke out a 0.1
per cent gain.
Stocks were subdued as the US and China, despite ongoing talks, implemented 25 per cent
tariffson$16 billion worth of each
other's goods.
The
world's two biggest economic powers have now slapped tit-for-tat
tariffson a combined $100 billion of products since
early July, with more in the pipeline, adding to risks to global economic growth.
Caroline Simmons, deputy head of the UK chief investment
office at UBS Wealth Management, cited such concerns as a reason for paring back an overweight
on global equities to a very small
position.
"We've got trade conflicts, and sanctions, in Turkey and Russia, so there are a few things going
on that we were a little nervous
about," Simmons said, though her firm still saw upside to equity markets, with good fundamentals.
The auto sector, particularly sensitive to
tariff developments, was the worst performing in Europe, down 0.7 per cent.
Earlier, MSCI's broadest index of Asia-Pacific shares outside
Hong Kong's Hang Seng index stumbled 0.5 per cent while Chinese blue-chips gained 0.4 per cent.
LEGAL
WOESWhile investors are looking ahead
to see how increasing trade barriers between China and the United States might affect corporate earnings, political turmoil also
weighed.
Trump's former lawyer Michael Cohen pleaded guilty to campaign finance violations
on Tuesday and former campaign manager, Paul
Manafort, was found guilty
on charges of tax and bank fraud.
Investors are considering whether the twin setback will hurt the president and
his Republican Party's prospects in mid-term elections.
That
weighedon Wall Street overnight and the market ended mixed despite the SP500
clocking its longest bull run in history.
E-Minis for the SP 500 were also subdued, trading 0.1 per cent lower.
Cohen's plea deal does not
mean the president has been implicated in anything, press secretary Sarah Sanders said at a White House briefing.
"While the (legal issues)
shouldn't substantially alter the
stock market landscape, money managers and analysts say the developments raise the likelihood of further
Trumpheading into the mid-term elections," said James McGlew, Perth-based analyst at stockbroking firm Argonaut.
Political tensions were
not limited to the United States.
Australian shares slipped 0.3 per cent after several senior ministers tendered their resignations
onThursday and demanded a second vote
on Prime Minister Malcolm Turnbull's leadership.
The Australian dollar fell 0.8 per cent for its
second straight day of declines.
The political uncertainty helped the dollar snap a five-day losing streak, with the greenback in demand
after the Federal Reserve suggested that a rate hike for September was
on the cards.
The dollar index, which measures it against a basket
of major currencies, added 0.3 per cent to 95.397, pulling off its lowest
in three weeks.
The euro was off 0.4 per cent at $1.1556, not far
from
Wednesday's two-week high of $1.1623
The Japanese yen weakened 0.2 per cent to 110.78 per dollar.
A stronger dollar put pressure
on commodities, with Brent crude, the
international benchmark, easing to $74.41 while US crude also declined to $67.67.
US gold futures for December delivery fell 0.7 per cent
while spot gold dipped 0.6 per cent to $1,188.16 an ounce
Copper fell 1.5 per cent.
