Stocks drop as on US threat of higher tariffs


Stocks in Asia dropped as the US threat of higher tariffs on imports from China continued to reverberate through global markets.

The dollar slipped against most major peers.

Shares fell across the region with the brunt of declines seen in Japan and Hong Kong. The drop was more modest in China. The yen and gold climbed as demand returned for haven assets, though European and US futures were little changed.

Investor focus has turned to Washington for the visit of China’s top trade negotiator later this week as President Donald Trump ratchets up pressure to clinch a deal that many market participants had expected was all but done. Treasuries were steady.

Earlier, US stocks had the broadest day of declines since the Christmas Eve sell-off, despite closing off the session lows.

"The two largest economic powerhouses, the US and China, either will be at a trade war or a trade peace and in reality, there's only a couple of people who know the answer to that and it isn't those of us on Wall Street," Larry Robbins, Glenview Capital Management's CEO, told Bloomberg TV in New York. "It's to be expected that there’s some volatility into this critical week."

Sentiment remains fragile as traders wait for the next development in the dispute between the world's two-biggest economies. China's government confirmed Tuesday that Vice Premier Liu He would visit the US for trade talks on May 9 and 10.

At the same time, the country was said to be preparing retaliatory tariffs on American imports should Trump carry out his threat of further duties. China exports unexpectedly fell in April, data showed Wednesday, and imports rose.

Meanwhile, the New Zealand dollar pared a slump of more than 1% as the central bank cut interest rates to a fresh record low and signalled the chance of one further reduction amid slowing global growth and weak inflation. The RBNZ becomes the first central bank in the developed world to begin loosening policy this cycle.

Elsewhere, Turkey's lira extended a slump as investors interpreted a decision to redo Istanbul's municipal vote as yet another manifestation of President Recep Tayyip Erdogan’s influence over independent institutions. Oil recovered after dropping toward $60 a barrel.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
In light of the recent looting, do you think a basic income grant is the right approach to deal with SA’s hunger and poverty problems?
Please select an option Oops! Something went wrong, please try again later.
It will go a long way in helping fight the symptoms of SA’s entrenched inequality, especially for those who are starving right now
20% - 1382 votes
SA’s problems are complex, and we instead need to spend that money on building and growing our economy, which will help the country in the long run
31% - 2165 votes
All grants are a problem as they foster a reliance on handouts
49% - 3435 votes