Stocks tumble on Trump’s China tariffs threat

Thinner trading volumes see Iseq down in light of London’s bank holiday shutdown

Wall Street, on Monday. Dow Jones industrials lost over 400 points in early trading over investor unease regarding developments in China-US trade negotiations. Photograph: Justin Lane/EPA

Wall Street, on Monday. Dow Jones industrials lost over 400 points in early trading over investor unease regarding developments in China-US trade negotiations. Photograph: Justin Lane/EPA

 

Stocks around the world tumbled on Monday and oil prices slumped after Donald Trump threatened to raise tariffs on China, triggering an investor exodus from risky assets.

The US president said on Sunday he would raise tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon. This was despite citing good progress in trade talks on Friday and praising his relationship with Chinese president Xi Jinping.

Dublin

The Iseq fell slightly on a day when trading volumes were thinner than usual in light of the London market’s bank holiday shutdown.

Ryanair fell almost 0.9 per cent to €11.66, while packaging group Smurfit Kappa unwound some of its Friday gains, dropping 0.5 per cent to €26.88. Insulation company Kingspan also fell, closing almost 2.8 per cent lower at €45.60. Bank of Ireland was down 1.9 per cent at €5.55.

Building materials group CRH closed up 0.1 per cent at €30.38, but there was a more convincing gain for food company Glanbia, which rose 2.8 per cent to €16.38.

Dalata Hotel Group added 2.8 per cent to €6.19 and Glenveagh Properties was up about 1 per cent to just under 84 cent.

London

The London market was closed for the May bank holiday and will re-open on Tuesday, when investors’ attention is likely to return to the possibility of a cross-party deal in Westminster to facilitate the departure of the UK from the European Union, after months of political impasse.

Europe

The pan-European Stoxx 600 index lost 0.9 per cent as equities slumped on trade tensions. In Germany, the Dax lost 1 per cent, which was their worst one-day showing in more than six weeks. The French Cac 40 was down 1.2 per cent, while Spain’s Ibex and Italy’s FTSE MIB were also in the red.

French energy giant Total fell 2.4 per cent amid broad weakness in oil prices. The Paris-listed oil major had earlier in the day agreed to buy Anadarko-owned operations in four African nations for $8.8 billion, contingent upon US company Occidental completing a takeover of Texas-based Anadarko.

Automotive stocks slumped in early trading after Trump’s remarks on tariffs reignited investors’ concerns about a trade war. Volkswagen fell 2.8 per cent, while BMW closed down 2.2 per cent, Renault finished 2.3 per cent lower and Volvo slipped 2.15 per cent.

Auto supplier Stabilus shed 5.7 per cent after cutting its full-year guidance due to the ongoing weakness in the global auto industry.

Stocks of chipmakers such as Siltronic, STMicro and AMS, which are also highly sensitive to trade war news, shed between 3 per cent and 5.3 per cent.

But Norway’s Telenor rose 4.7 per cent after it said it was in talks with Malaysia’s Axiata Group to run a jointly owned telecoms giant in Asia with nearly 300 million customers,

US

Wall Street stocks posted broad-based declines on Monday, but bounced back from session lows, after Trump’s surprise threat to raise tariffs on Chinese goods this week, which sparked a flight from riskier assets.

Boeing, the single largest U.S. exporter to China, fell 1.7 per cent, while chipmakers, which get a good portion of their revenue from China, tumbled.

Apple declined 2.1 per cent, dragging on the broader tech sector, while other marquee names such as Amazon.com, Microsoft and Facebook fell about 1 per cent.

General Motors declined 2.7 per cent, while Ford dipped 0.6 per cent. In a bright spot, Anadarko Petroleum rose 3.6 per cent after Occidental Petroleum increased the cash component of its $38 billion bid, removing a need for any deal to receive the approval of Occidental’s shareholders.

Occidental is trying to convince Anadarko to accept its offer and abandon the agreed $33 billion sale to Chevron Corp . The oil major was up 1.6 per cent. – Additional reporting: Reuters / Bloomberg