Global shares rocky, yuan weakens as global trade talk shakes markets

NEW YORK (Reuters) – A major global stocks index fell modestly on Friday while the Chinese yuan weakened as persistent global trade tensions hovered over financial markets.

Geopolitical concerns also spiked on news that talks regarding Britain’s split with the European Union had faltered, putting pressure on the British pound.

MSCI’s gauge of stocks across the globe shed 0.25%, but pared steep early losses.

“Markets are priced so close to perfection that it really doesn’t take very much of a wobble to any of the bull narratives to catalyze moves in the market, and I think that’s what we’re seeing with the trade headlines,” said Pete Cecchini, chief market strategist with Cantor Fitzgerald.

In China, the Communist Party’s People’s Daily wrote in a front-page commentary that the U.S. trade war will only make China stronger and will never bring the country to its knees.

(Graphic: Asia stock markets – tmsnrt.rs/2zpUAr4)

(Graphic: Asia-Pacific valuations – tmsnrt.rs/2Dr2BQA)

It was the latest salvo in the trade conflict that has involved tit-for-tat tariffs on imports involving the world’s two largest economies. Recent tensions caught some investors off guard after they had expected the two sides to come to a near-term deal to resolve the months-long trade dispute.

Meanwhile, the Washington Post and Politico reported that U.S. officials have agreed to remove tariffs on steel and aluminum imported from Canada and Mexico in 48 hours, paving the way for the three North American counties to enact a new trade pact.

“What’s driving the market on a day-to-day basis is the 24-hour news cycle of headlines primarily around U.S.-China trade relations,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 10, 2019.

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