London — Global shares slipped on Thursday on growing signs that a trade dispute between the US and China is taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets.
In Europe, too, earnings were top of the agenda. Tech stocks led the slide as software firm SAP, Europe’s most valuable tech stock by market cap, reported poor results, also flagging the impact of the US-China trade war. “It’s still about the US and China dispute,” Christophe Barraud, chief economist and strategist at Market Securities said. “The trade war is creating uncertainty, weighing on capex, and clearly on trade flows. There are also problems with guidance, especially in the transportation sector. The fact is that one of the key stories of this year is global trade flows contraction.”
US house-building fell in June for a second consecutive month, with building permits also falling, in a possible sign of more trouble ahead for the housing market. Amid the gloomy outlook, bets for further monetary policy easing from major central banks have grown, with speculation on whether the US Federal Reserve will be cut by 25 basis points or 50 in July.
Earlier in the day, MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3%, with Tokyo’s benchmark Nikkei tumbling 2.0%, its biggest one-day fall in four months.In currencies, the dollar edged lower against its rivals on the softer US treasury yields, with investors focusing their attention on the Fed’s meeting next week. Against a basket of its rivals, the dollar edged 0.1% lower to 97.195.
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