European shares fell on Friday, with cars and basic resources stocks bearing the brunt of a wide sell-off triggered by mounting worries that US tariffs on up to US$60 billion of imports from China could escalate.
Most sectors were trading in negative territory, sending the pan-regional STOXX 600 benchmark index falling for a third day, down 0.9 percent to its lowest level since February last year and down 3.1 percent for the week.
All eyes were on the response from China, which urged the US to “pull back from the brink” and unveiled its own plans to impose tariffs on up to US$3 billion of US imports.
Although there are risks that the tariffs could trigger a full-blown trade war, some investors said they still did not expect that to happen, adding that the retaliation measures announced by China remained relatively mild.
However, caution pushed investors into defensive stocks, such as utilities and telecoms, which bucked the trend with gains of 0.1 percent and 0.3 percent respectively, as they are seen as less exposed to a deterioration in global trade.
Eurozone indices, including the export-sensitive DAX, also fell 1.8 percent, but remained above lows seen early this month, while the FTSE declined 0.4 percent to fresh 15-month lows.
“Our central scenario remains one in which retaliation will be contained and will leave little impact on growth, but the risk of it happening alone is enough for us to maintain a preference for defensive assets,” said UniCredit economists led by Chiara Silvestre in a note.
Among the few gainers on Friday were shares in precious metals miners Fresnillo PLC, Randgold Resources Ltd and Polymetal International PLC, all up between 0.8 and 4.2 percent, as the gold price rose on the back of growing demand for safe haven assets.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
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