Asian markets feel pain as trade war escalates. Europe gets a break

Asian markets feel pain as trade war escalates. Europe gets a break

Asian markets feel pain as trade war escalates. Europe gets a break

US stocks edged higher on Tuesday, as investors picked up beaten-down technology and industrial stocks following optimistic comments from Washington and Beijing that tempered concerns about a further escalation in the trade war.

Communications companies were also higher. The Stoxx Europe 600 Index gained 0.5%.Germany's DAX Index advanced 0.9%.The MSCI Emerging Market Index added 0.3%.The MSCI Asia Pacific Index advanced 0.6%, the biggest gain in six weeks. The Hang Seng in Hong Kong dropped 1.5%, Japan's Nikkei 225 fell 0.6% and South Korea's Kospi ticked up 0.1%.

The benchmark S&P/ASX200 index was down 44.3 points, or 0.71 per cent, to 6,284.2 points at 1630 AEST on Tuesday.

"However, differences on key issues and in negotiating styles may spark more market volatility ahead". Beijing said Monday it would raise tariffs on roughly $60 billion worth of US imports June 1 after President Trump increased duties on $200 billion of Chinese imports on Friday.

Data showed import prices increased 0.2% last month, while economists polled by Reuters had forecast a 0.7% rise. USA officials had accused Beijing of reneging on its side of the bargain and threatened to raise tariffs on $200 billion of Chinese imports to 25% from Friday.

Also on Monday, Treasury Secretary Steven Mnuchin told CNBC the two countries are "still in negotiations". "I think this is going to last for a while", he said. This had also been a continuation from the positive tone held during the White House dinner on Monday and a stark contrast from the rhetoric that had ignited the latest round of trade tensions.

"We're not counting on a full resolution", said John Lynch, chief investment strategist at LPL Financial.

Stocks are still lower than they were last week, before China pledged to raise tariffs on us goods. President Donald Trump is preparing to meet his Chinese counterpart, Xi Jinping, at next month's G-20 summit, an encounter that could prove pivotal in the deepening clash over trade. As 2019 began, investors increasingly bet that a U.S. The USTR outlined a potential duty of up to 25% tariffs on China for goods with an annual trade value of roughly $300 billion.

The sharp stock-market selloff of recent days is confronting investors with a quandary long avoided during the 10-year-old bull market: Riskier assets suddenly look very risky.

China's Treasuries holdings are still more than double where they stood before the USA recession and comprise about a third of the country's $3.1 trillion in foreign-exchange reserves.

The Chinese journalist's tweet on Monday barely registered in the bond market, as it came amid haven buying as stocks slumped in the face of the trade impasse. The declines are as a result of the escalating trade war between United States and China.

After a strong beginning of the year, U.S. stocks suffered the worst drop in months yesterday.

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