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World stocks end four-day winning streak as U.S.-China tensions grow

Published 08/06/2020, 07:59 PM
Updated 08/07/2020, 04:40 AM
© Reuters. Pedestrians wearing face masks walk near the Bund Financial Bull statue in Shanghai

© Reuters. Pedestrians wearing face masks walk near the Bund Financial Bull statue in Shanghai

By Saikat Chatterjee

LONDON (Reuters) - World stocks ended four days of gains on Friday after U.S. President Donald Trump cranked up simmering tensions with China by banning U.S. transactions with two popular Chinese apps, Tencent's WeChat and ByteDance's Tiktok.

Chinese stocks led losers in Asia and its currency slumped after Trump issued the executive orders. His administration said this week it was stepping up efforts to purge "untrusted" Chinese apps from U.S. digital networks and called TikTok and WeChat "significant threats."

"The U.S. pressure on China's tech sector appears likely to continue in the presidential elections, injecting volatility in the sector and opening the door to escalatory retaliation," UBS strategists said.

European stocks opened lower, with major indexes down between 0.2% to 0.4% in early trading (STOXX) (FTSE).

MSCI's broadest index of world stocks (MIWD00000PUS) fell 0.2% on Friday after up four consecutive days of gains. It was less than 3% away from a late February peak.

Asia-Pacific shares outside Japan (MIAPJ0000PUS) fell 1%, with mainland Chinese indexes down more than 1% each, even though Chinese trade data for July showed exports beat expectations.

Risk appetite was also subdued on Friday with hopes fading for a quick deal by U.S. policymakers on stimulus worth at least $1 trillion to support the country's fragile economy. The White House and Democrats remained far apart on the size of the stimulus package and what to include.

The risk-off mood pushed U.S. Treasury yields lower and offered a brief respite to the struggling dollar, which has been under pressure in recent weeks. The 10-year U.S. Treasury yield (US10YT=RR) dipped 1.1 basis points to 0.5198%, near Thursday's five-month low of 0.504%.

Closely watched U.S. non-farm payrolls data, due at 1230 GMT, is expected to show an increase of 1.58 million in July, compared with 4.8 million in June.

Gold hit a record high of $2,075.2 per ounce XAU= before succumbing to profit-taking to slip to $2,063.

Silver dropped 1.7% to $28.452 per ounce following its rise to a seven-year high of $29.838.

© Reuters. People walk past the London Stock Exchange Group offices in the City of London, Britain

Oil prices were little changed, with Brent futures (LCOc1) down 0.1% at $45.04 per barrel.

Latest comments

Buy the dollar for a long time .......... Inflation is coming to America, the Fed must raise rates!
Globalization and trade with China, among other large emerging economies are why our economy has seen such high growth over the past 30 years. Isolationism and protectivism will keep us stagnant I am afraid.
Its the opposite. What high growth? 2%, 3% or maybe 4%. Funny, while US was growing 2.8%, China was growing at 40% and India was growing at 28%. Average growth rate of the USA economy since 1947 = 3.06%. Check it out.
not sure I'd call China an emerging economy anymore, aren't they the second largest, and for a short time at least, the largest economy?
from year 2000+ china is the largest world economy in numbers, not positioned the 1st strongest
Global turbulence sell offs initiated dump pump donald trump...but China will buy them back...its a long ongoing tussle bt usa china
China is a paper tiger. kow tow to Trump!
The Payroll Protection Plan, the source of bailouts for zombie companies, ends on Saturday. That means that small businesses will be laying off workers on the way to bankruptcy court. Futures look down everywhere. At its March low, the NASDAQ was about 6800.What has happened since then to account for a rise of over 4000 points? 160,000 deaths, an 8% drop in GDP during one quarter, unemployment understated at 11.1%. Those things have always driven markets down, and they will this time too.
Trump will ask Feb to print more
unlimiting ammo
This time its a paradigm shift. It occurs every 30 years. See the history. Next big change, 2050.
China is controlling internet trancations which favour chinese companies for many years now that is fair. If America wants to do the same its not fair?
Flash in the pan.  Tomorrow will be green on Wall Street.
“Art of the Trade War” more like it lol
The tip of the spear always is going to do the most work and get the most damage in return. But there's no use in blunting it's edge.
my ***
Asia “set to open higher” while all is red in asia for hours. Update this article
These articles are trash. They won’t update anything lol.
Congresspeople dont deserve another recess until thankgiving. Snakes and fraudsters
BS, the Asian market closes even before the data is released. stop writing non sense
US payrolls feeding asians or whatChange headlines
now that banks made a fortune buying all the liquidated positions in march, dumping it into the retail euphoria now while loading up on bonds... let the USD pump and stonk/PMs dump through november
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