LONDON MARKETS: FTSE 100 Slides More Than 1% As U.S. Seeks More Tariffs On Goods From China
11 July 2018 - 7:36PM
Dow Jones News
By Carla Mozee, MarketWatch
Burberry posts slower growth in sales
The U.K.'s blue-chip stocks sharply dropped Wednesday, falling
by the most in two weeks, as the U.S. said it plans to hit Chinese
goods with another $200 billion in tariffs, intensifying the trade
fight between the world's largest economies. |
How markets are moving
The FTSE 100 index fell 1.3% to 7,593.68, on course for its
steepest decline since June 25. All sectors fell, led by the basic
materials and tech groups. The index on Tuesday finished up by less
than 0.1%
(http://www.marketwatch.com/story/uk-stocks-wobble-as-brexit-turmoil-casts-shadow-over-government-2018-07-10)
after a choppy session.
The pound was at $1.3279, little changed from $1.3274 late
Tuesday in New York. Against the euro, the pound rose to EUR1.1313
from EUR1.1303.
What's driving the market?
U.K. and the broader European stock market keyed off a slump
across Asian equity markets. The Shanghai Composite sank 1.8% and
Hong Kong's Hang Seng Index fell 1.3%. U.S. stock futures
(http://www.marketwatch.com/story/dow-set-to-fall-more-than-200-points-after-us-unveils-new-china-tariffs-2018-07-11)
also pointed to a sharp drop when trading starts Wednesday on Wall
Street.
The slides came after the White House said Tuesday it's
preparing to assess tariffs of 10% on a further $200 billion in
products imported from China
(http://www.marketwatch.com/story/us-readying-new-tariffs-on-up-to-200-billion-of-chinese-goods-2018-07-10).
China's Ministry of Commerce said in a statement that the new
levies are "totally unacceptable" and that the behavior is hurting
not just China, but the whole world.
The U.S. last week hit Beijing with levies on $34 billion in
goods, and Beijing retaliated with tariffs of the same amount.
The newly proposed round of tariffs on items including
electronic components, furniture and tuna would take effect in two
months, allowing time for the two countries to discuss the matter,
and for U.S. businesses to comment on the line-up of affected
goods.
Heavily weighted mining shares on the FTSE 100 were hit again on
the prospect of worsening trade relations between the U.S. and
China, which is the world's largest buyer of copper. Copper futures
dropped nearly 3% on the New York Mercantile Exchange on
Wednesday.
What strategists are saying
-- "If we see these duties kick in, nearly half of all Chinese
exports will be under tariffs. Let me put this in simple language
for the markets to try to understand: "This is a T-R-A-D-E W-A-R.
Not a spat," said Michael Every, senior Asia-Pacific strategist at
Rabobank, in a note.
For its part, China "can't put $200 billion of tariffs in place
as it doesn't buy $200 billion more of U.S. goods! So where do we
go? Somewhere that says 'risk on'? Note that at time of writing
[the yuan] was back at 6.69 again, and Chinese equities are
tanking," said Every.
Stock movers
Investors yanked down shares of metals producers, with Glencore
PLC (GLEN.LN) down 4.5%, Anglo American PLC (AAL.LN) off by 4%, and
copper miner Antofagasta PLC (ANTO.LN) lower by 3.4%. Iron ore
producer BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) fell 3.1%.
Shares of oil producers were also knocked down alongside miners.
BP PLC (BP.LN) (BP.LN) sloughed off 2.5% and Royal Dutch Shell PLC
(RDSA.LN) (RDSA.LN) moved 1.9% lower.
Shares of Asia-focused lenders HSBC PLC (HSBA.LN) and Standard
Chartered PLC (STAN.LN) were down 1.1% and 2.1%, respectively.
Burberry Group PLC shares (BRBY.LN) (BRBY.LN) lost 2.7% after
the luxury-goods retailer said dampened demand among tourists in
Europe led to slower like-for-like sales in the first quarter
(http://www.marketwatch.com/story/burberry-quarterly-like-for-like-sales-rise-3-2018-07-11).
Those sales rose 3% compared with 4% in the year-earlier
quarter.
Indivior PLC shares (INDV.LN) plunged 31% on the mid-cap FTSE
250 index after the drug maker issued a profit and sales warning
for 2018,
(http://www.marketwatch.com/story/indivior-warns-on-sales-profit-due-to-us-issues-2018-07-11)
citing negative market developments in the U.S.
Sky PLC (SKY) fell 0.8% after 21st Century Fox Inc. (FOXA)
raised its takeover bid for the British broadcaster, valuing it at
GBP24.5 billion ($32.5 billion), heating up a bidding war with
Comcast Corp. (CMCSA) .
(END) Dow Jones Newswires
July 11, 2018 05:21 ET (09:21 GMT)
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