Trump's China tweets set to hurt New Zealand stock market in Monday trading

Stocks took a dive after US president Donald Trump made Twitter threats and announced higher tariffs in response to new Chinese import taxes.

New Zealand’s stock exchange could be in for a “rough day” of trading after tweets by United States President Donald Trump last week ramped up tensions in a US/China trade war.

On Saturday morning (New Zealand time) Trump sent a series of tweets ordering American companies to immediately move their manufacturing back to the US.

“The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must stop. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies home and making your products in the USA,” Trump tweeted.

The comments shocked the markets with US stock exchanges S&P, Dow Jones and Nasdaq all ending the day down.

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Trump later said he would be raising planned tariffs on Chinese goods.

New Zealand's stock exchange the NZX was closed when US President Donald Trump made comments ramping up the trade war between the US and China.

SUPPLIED

New Zealand’s stock exchange the NZX was closed when US President Donald Trump made comments ramping up the trade war between the US and China.

Stock markets in this part of the world had already closed for the week when Trump made his announcements.

The New Zealand stock market, the NZX, was down 1.4 per cent in the first hour of trading on Monday.

Craig Investment Partners head of private wealth research Mark Lister said most, if not all markets in the region would open down.

“We will definitely have a rough day today,” Lister said.

“New Zealand, Australia, Japan, all the region will be playing catch up.”

The New Zealand market would hold up better than most because it was a defensive, predictable market with relatively low risk, low volatility companies.

Craig Investment Partners head of private wealth research Mark Lister says most markets in this part of the word will be down on Monday.

JOHN BISSET/STUFF

Craig Investment Partners head of private wealth research Mark Lister says most markets in this part of the word will be down on Monday.

“We will have a more modest down day.”

NZX-listed companies that exported or operated in international markets would fare the worst such as A2 Milk and Push Pay, he said.

He said he expected the market to be down when it opened at 10am, followed by another potential drop around midday when the Australian market opened, he said.

United States President Donald Trump ordered US companies to move manufacturing back to the US in a tweet on Saturday.

ALEX BRANDON/AP

United States President Donald Trump ordered US companies to move manufacturing back to the US in a tweet on Saturday.

Trump’s tweets came after China said it would impose new tariffs on US$75 billion in goods, including reinstated levies on car products.

The tit for tat is the latest in a long-running trade war between the economic super powers.

“It’s a clear negative that the trade war is escalating. It matters and it’s a big deal and we need to watch it very carefully,” Lister said.

If the US/China trade war did worsen it could send the world into a recession, he said.

“It could get a whole lot worse.”

It was a difficult time for investors because they had to not only consider economic and market outlooks but also how politicians, like Trump, would react in the future, he said.

“A lot of it is political gamesmanship.”

Stuff

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