Global shares struggle as Trump casts shadow on trade
World shares rose yesterday but were set to end in the red for a second week running amid intensifying worries over the fallout of a trade dispute resulting from US tariffs, while oil prices rose with an OPEC meeting underway.
The MSCI All-Country World index, which tracks stocks in 47 countries, was up 0.3pc by afternoon in Europe but down 1.3pc on the week.
That was its worst weekly performance since the week ended March 23.
In Dublin, the Iseq index was up at 7,092.83. But the wider mood is investor nervousness over a possible full-blown trade war that has deepened this week over increasingly sharp rhetoric between the United States and China, and growing evidence of the economic damage such a conflict could produce.
Chinese state media said yesterday that US protectionism was self-defeating and a "symptom of paranoid delusions" that must not distract China from its path to modernisation.
Earlier this week, German carmaker Daimler cut its earnings forecast, saying tariffs on cars exported from the United States to China would hurt Mercedes-Benz sales.
India joined the European Union and China in retaliating against US President Trump's tariffs on steel and aluminium, raising import duties on US almonds by 20pc.
"With no negotiations in sight at the moment, our base case (scenario) is shifting to a further escalation of the trade conflict between the two countries," wrote analysts at Danske Bank in a note to clients.
There is a risk of a further deterioration in relations on June 30, when Washington is due to announce a plan to restrict Chinese investments into the United States and limit exports of US tech products to China, they added. In Europe better-than-expected Eurozone purchasing managers index for services helped drive a timid relief bounce in European shares, loed by financial.
But the pan-European STOXX 600 was still set for the biggest weekly loss in three months amid the worsening trade outlook.