Global shares extend slide on Trump trade threats

Published: September 01, 2018 11:24:44 | Updated: September 03, 2018 16:10:10

World stocks ended August much as they began the month - under the dark cloud of a potentially worsening trade war.

A closely watched barometer of equities world wide fell for a second day on Friday after US-Canada trade talks ended without resolution.

The markets slipped after a report that US President Donald Trump was preparing to step up a trade war with Beijing. The news dampened risk appetite and erased some gains from a rally this week.

The MSCI All-Country World Index, which measures stocks in 47 countries, shed 0.34 per cent for the day, but eked out a 0.7 per cent return for the month, including dividends.

The index’s modest rise masked a chasm between US and emerging markets. The S&P 500 rose 3.0 per cent for the month, while the MSCI Emerging Markets index is down by roughly the same margin.

On Friday, the Dow Jones Industrial Average fell 22.1 points, or 0.09 per cent, to 25,964.82, the S&P 500 gained 0.39 points, or 0.01 per cent, to 2,901.52 and the Nasdaq Composite added 21.17 points, or 0.26 per cent, to 8,109.54.

Oil, which could see less demand if trade tensions slash economic growth, settled lower. Brent was down 0.45 per cent to $77.42 per barrel.

Trade anxieties boosted the dollar, seen as a short-term winner if the United States reduces imports. The greenback rose 0.4 per cent against an index of its peers.

The Mexican peso lost 0.02 per cent versus the US dollar and the Canadian dollar fell 0.50 per cent.

Broadly, emerging market currencies showed signs of stability even as the posted their fifth straight month of losses in dollar terms.

An index of those countries’ currencies rose 0.11 per cent on Friday.

Currencies in two particularly troubled economies, Turkey and Argentina, strengthened against the dollar.

There are other trouble spots. The Indonesian rupiah hit a nearly three-year low. The Indian rupee INR= touched a record low.

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