Market Overview

Trade war between China and the U.S. will hit global growth

Steep losses in Chinese share markets dented Asian equities on Friday as lingering trade war tensions and weak corporate earnings in Europe added to worries about global growth. With U.S. markets closed overnight for Thanksgiving and Japan on holiday on Friday, early trading lacked direction until the sell-off in China brought on more pain for stock investors in the region.

Shares in Europe, in contrast, are expected to rise Friday. Financial spreadbetters expect London’s FTSE .FTSE, Frankfurt’s DAX .GDAXI and Paris’ CAC .FCHI to advance 0.3 percent each. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.23 percent as Chinese blue-chips .CSI300 tumbled 2 percent and the Shanghai Composite index .SSEC lost 2.2 percent.

China’s markets have been mired in a slump as the country’s trade war with the United States has exacerbated worries about slowing growth. Few analysts expect sustained improvement for Chinese shares even if U.S. and Chinese leaders make progress in mending ties at a G20 meeting in Argentina at the end of the month. Seoul’s Kospi .KS11 ended 0.6 percent lower and Taiwan shares .TWII lost 0.5 percent. Hong Kong’s Hang Seng .HSI was down 0.6 percent in afternoon trade.

A draft deal between Britain and the European Union on future relations reached late Thursday did little to lighten the mood. China’s yuan CNY=CFXS fell to 6.9386 per dollar, with trade concerns weighing. The currency has also come under pressure in recent weeks in sympathy with falling Chinese rates, with yields on shorter-term Chinese government bonds below their U.S. counterparts.

In commodities markets, oil prices hit 2018 lows as U.S. inventories rose to their highest level since December, adding to concerns about a global crude glut. U.S. crude CLc1 was trading down 2.5 percent at $53.24 after coming within 5 cents of an October 2017 low reached earlier in the week. Brent crude LCOc1 futures hit their lowest since December 2017 at $61.52 per barrel, and were last down 1.2 percent at $61.85 a barrel.

Trade war between China and the U.S. will hit global growth, Reuters, Nov 23
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