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Update Equities:Trade war fears

Stock markets declined across the globe this week, as trade tensions between the US and China flared up again and the political uncertainty in Italy added further woes to markets.
Update Equities:Trade war fears
Update Equities:Trade war fears

Stock markets declined across the globe this week, as trade tensions between the US and China flared up again and the political uncertainty in Italy added further woes to markets.

The STOXX Europe 600 Index declined by some 2%. German stocks were hit even harder on fears that a trade war could substantially impact industrial companies and car producers. Chinese shares also suffered, declining by some 4%. US stocks did relatively well, helped by the strengthening US dollar.

Daimler cut its earnings outlook for 2018, as a result of the trade tensions. Daimler produces cars in the US, which are subsequently exported to China. When China imposes tariffs on US goods, this will hurt the profitability of Daimler’s US operations.

However, the company’s German peers, BMW and Volkswagen, rushed to confirm their outlooks for the year. Volkswagen has a large exposure to China, but would be hit less by the trade measures, as many models are produced locally.

Renault shares also dropped by 5% on Thursday, as a French government official stated that the State will consider its share holdings, including its 15% stake in the car producer.

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