Global stocks mixed as China holds fire
Business Live: Global stock markets were mixed on Tuesday, with Wall Street snapping a multi-session losing streak, while European and Asian bourses retreated amid the escalating US-China trade war.
Major US indices climbed more than one percent after China moved to stabilize its currency, ending a five-day losing streak for the Dow and a six-day skid for the S&P 500 and Nasdaq.
The China move “calmed the currency market and we saw the equity market and the futures market start to turn positive,” said Quincy Krosby, chief market strategist of Prudential Financial. Equities had tumbled Monday after China allowed the yuan to slide sharply against the dollar following US President Donald Trump’s announcement that he would impose 10 percent tariffs on another $300 billion in Chinese goods.
Major US indices lost around three percent in Wall Street’s worst session of 2019, while European and Asian stocks also tumbled on fears the protracted US-China trade fight will derail the global economy.
On Tuesday, investors initially relaxed a bit after the People’s Bank of China fixed the yuan at a higher level against the dollar than analysts had expected, signaling a degree of restraint after Washington slapped the “currency manipulator” label on China.
In spite of Tuesday’s moves by Beijing to boost the yuan, the latest back and forth between the United States and Beijing, including the US designation late Monday of China as a currency manipulator, “hardens trade tensions,” said a note from Oxford Economics.
“Today’s announcement makes further Chinese trade concessions look
increasingly unlikely. This in turn increases the likelihood of the 10
percent tariff going ahead,” Oxford said, adding that the risk of a “currency
war” between the two countries “can’t be ruled out.”
Dhaka 07 August (campuslive24.com)//MIH