Global stocks mixed after US, China impose new tariff hikes

Investors sit on chairs as they watch stock market movements displayed on screens at a securities company in Beijing in this file photo taken on Aug. 26. (AFP)
Updated 02 September 2019

Global stocks mixed after US, China impose new tariff hikes

  • Surveys of Chinese factory activity show weak demand amid mounting tariff war with Washington

BEIJING: European stock markets opened higher while Asia was mixed Monday after Washington and Beijing escalated their war over trade and technology with new tariff hikes.

Benchmarks in London, Paris and Shanghai advanced. Tokyo and Hong Kong declined.

Markets reacted less strongly to the weekend tariff hikes on billions of dollars of goods than to previous increases. Investors are hoping for progress in talks this month, but analysts warn the fight over trade and technology is unlikely to be quickly resolved.

“The short-lived truce will probably provide limited relief,” said Zhu Huani of Mizuho Bank in a report. “Businesses have become increasingly uncertain about future prospects, evidenced by the pullback in business investment amidst growing concerns on growth.”

In early trading, London’s FTSE 100 rose 0.9 percent to 7,274.50 and France’s CAC 40 added 0.1 percent to 5,487.74. Germany’s DAX was 10 points higher at 11,949.88.

US markets were closed for a holiday.

In Asia, the Shanghai Composite Index gained 1.3 percent to 2,924.11 while Tokyo’s Nikkei 225 shed 0.4 percent to 20,620.19. Hong Kong’s Hang Seng lost 0.4 percent to 25,626.55.

Seoul’s Kospi ended 1 point higher at 1,969.19 and Sydney’s S&P-ASX 200 retreated 0.4 percent to 6,579.40. New Zealand and Taiwan gained while Southeast Asia markets retreated.

On Sunday, the US started charging 15 percent tax on about $112 billion of Chinese imports. China responded by charging taxes of 10 percent and 5 percent on a list of American goods.

Negotiators are due to meet this month in Washington but neither side has given any sign it might offer concessions.

The United States is pressing China to narrow its trade surplus and roll back plans for government-led creation of global competitors in robotics and other industries. Its trading partners say those violate its free-trade obligations and are based on stealing or pressuring companies to hand over technology.

The two governments have imposed higher taxes on about two-thirds of the goods they import from each other.

“We’ll see what happens,” President Donald Trump told reporters. “But we can’t allow China to rip us off anymore as a country.”

On Wall Street, stocks ended little changed Friday after a listless day of trading ahead of a holiday weekend.

The market closed out August with its second monthly decline this year, after May.

Financial, industrial and health care stocks were among the big winners. Those sectors outweighed losses in consumer goods makers and communication services stocks. Shares in companies that rely on consumer spending also fell.

The S&P 500 index rose 0.1% to 2,926.46. The Dow Jones Industrial Average gained 0.2% to 26,403.28. The Nasdaq slid 0.1% to 7,962.88.

Two surveys of Chinese factory activity showed demand is weak amid the mounting tariff war with Washington.

The business magazine Caixin said its monthly purchasing managers’ index showed activity edging up but a gauge of new orders fell to its lowest level this year. A separate survey by an industry group, the China Federation of Logistics & Purchasing, showed activity declining. It said demand was “relatively weak.”


Emirates trims Boeing shopping list amid 777X delays

Updated 20 November 2019

Emirates trims Boeing shopping list amid 777X delays

  • The Middle East’s largest airline in 2017 signed an initial agreement to buy 40 Boeing 787-10s in a deal worth $15.1 billion
  • But Emirates’s purchases overhaul reduces the order to 30 planes

DUBAI: Emirates Airline on Wednesday slimmed down its purchasing plans with Boeing amid delays in delivering an order of 156 of the new long-range 777X aircraft, substituting instead 30 of its 787-9 Dreamliners.
The Middle East’s largest airline in 2017 signed an initial agreement to buy 40 Boeing 787-10s in a deal worth $15.1 billion, but the overhaul reduces that to 30.
At the same time, Emirates is cutting its 156-strong order of the larger 777X to 126 planes.
The restructuring means that the carrier now has just 156 aircraft ordered from Boeing, compared to 196 previously in both firm orders and initial agreements, an airline spokeswoman confirmed to AFP.
“Emirates reduced its 777X order of 156 to 126 and substituted them with the Dreamliners,” Emirates president Tim Clark told a news conference at the Dubai Airshow.
Boeing said the airline will update its order book “by exercising substitution rights and converting 30 777 airplanes into 30 787-9s.”
Emirates said in a statement that for the 777X, it “will enter into discussions with Boeing over the next few weeks on the status of deliveries.”
Emirates in 2013 signed a $76-billion contract for 150 Boeing 777X twin-engine aircraft, powered by GE’s new GE9X engine, in what was the single largest order by value in the history of US commercial aviation.
The order was subsequently increased to 156 planes.
The 777X was originally scheduled to take off on its first test flight this summer, however its development has been slowed by issues with the engine and Boeing has pushed back the timeframe to early 2021.
The delays also hit as Boeing is in the process of completing changes required by regulators on the 737 MAX, which has been grounded worldwide after two crashes that resulted in 346 deaths.