Renewed jitters over China-US trade tensions pull world shares lower
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12:05 AM on Tuesday, October 14
By YURI KAGEYAMA
TOKYO (AP) — Shares fell Tuesday in European and most Asian markets as new Chinese sanctions against the U.S. subsidiaries of a major South Korean shipbuilder shook a fragile sense of calm over trade tensions with Washington.
France's CAC 40 declined 0.8% in early trading to 7,873.25, while the German DAX lost nearly 0.9% to 24,181.83. Britain's FTSE 100 shed 0.2% to 9,426.92.
The future for the S&P 500 lost 0.8% while that for the Dow Jones Industrial Average was down 0.5%. On Monday, the S&P 500 jumped 1.6% to recover more than half its drop from Friday. The Dow Jones Industrial Average surged 1.3% and the Nasdaq composite gained 2.2%.
Investors will be watching for comments by U.S. Federal Reserve chair Jerome Powell to a meeting later Tuesday of the National Association for Business Economics.
During Tuesday trading, Japan’s benchmark Nikkei 225 dropped 2.6% to finish at 46,847.32. The slide reversed a rally last week in Tokyo after conservative lawmaker Sanae Takaichi was chosen to lead the country's ruling Liberal Democratic Party.
The subsequent collapse of the LDP's 26-year-old coalition with the Buddhist-backed Komeito has cast doubt over whether Takaichi will become Japan's first female prime minister and added to political uncertainty.
The renewed sense of unease over the state of China-U.S. trade tensions pulled benchmarks in Hong Kong and Shanghai lower.
Hong Kong's Hang Seng lost 1.7% to 25,441.35, while the Shanghai Composite shed 0.6% to 3,865.23.
Markets had calmed Monday after President Donald Trump wrote on his Truth Social media platform Sunday, “Don’t worry about China. " On Friday, Trump helped spur a sell-off after he threatened to hike tariffs on China by 100% in reaction to Beijing's latest controls on exports of rare earths.
On Tuesday, China’s Commerce Ministry said it was banning dealings by Chinese companies with five subsidiaries of South Korean shipbuilder Hanwha Ocean, swiping at Trump’s efforts to rebuild the industry in America.
South Korea and the U.S. have been building closer ties in shipbuilding in response to China’s dominance as the world’s largest shipbuilder. Hanwha acquired the Philly Shipyard in Pennsylvania last year and has contracts with the U.S. Navy to perform maintenance, repair and overhaul work for U.S. naval vessels.
Hanwha Ocean's shares fell 5.8% in Seoul on Tuesday and the benchmark Kospi lost 0.6% to 3,561.81.
Australia's S&P/ASX 200 rose nearly 0.2% to 8,899.40.
In energy trading, benchmark U.S. crude lost $1.21 to $58.28 a barrel. Brent crude, the international standard, fell $1.27 to $62.05 a barrel.
In currency trading, the U.S. dollar fell to 152.03 Japanese yen from 152.29 yen. The euro cost $1.1557, down from $1.1569.
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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama
