Stocks diverge, dollar dips tracking Trump tariffs

LONDON: Stock markets diverged and the dollar dipped Friday as traders tracked US President Donald Trump’s latest tariff announcement, economic data and earnings.

The European Union on Friday vowed to respond “firmly and immediately” to trade barriers after Trump unveiled tariffs that could hit allies and competitors.

Trump on Thursday said he had decided to impose reciprocal duties, in a dramatic escalation of an international trade war he has unleashed since taking office in January.

The president has unveiled a range of hardball measures to bring an end to what he says is years of countries taking advantage of the United States, fuelling trade war fears and leading to warnings of another inflation spike.

However, investor sentiment has largely held up on hopes that many of the tariffs can be rowed back with negotiations, while Trump´s announcement of plans to hold Ukraine peace talks with Russian counterpart Vladimir Putin has added some optimism.

US commerce secretary nominee Howard Lutnick said studies on where and who to hit should be completed by April 1, and the tariffs could start the day after -- providing some relief to investors.

"Tariff ambiguity still reigns, but markets are currently drawing some comfort from the news" of the delay, said National Australia Bank´s head of currencies research and markets, Ray Attrill.

Observers said there appeared to be a feeling on trading floors that the measures were being used as a negotiating tactic by the White House.

Hong Kong led the way among major stock markets Friday, closing up more than three percent.

Tech firms extended their recent surge on a Bloomberg report that China had invited Alibaba co-founder Jack Ma and other top entrepreneurs to meet Beijing´s top brass, fuelling hopes of fresh support for the private sector.

Alibaba piled on 6.3 per cent, while JD[dot] com and Tencent each rose more than 7.0 per cent.

Tokyo’s index dropped despite an 8.7-per cent surge in Sony following a healthy earnings report as well as rallies in Nissan and Honda a day after they confirmed the scrapping of merger talks.

Paris was slightly higher nearing the half-way stage, while Frankfurt and London slipped heading into the weekend break.

French luxury giant Hermes reported record earnings for 2024 and confirmed an “ambitious” growth target for this year despite geopolitical and economic uncertainty.

Official data meanwhile showed that the eurozone economy grew by 0.1 per cent in the fourth quarter, a welcome revision after preliminary figures showed growth slowed to a halt.

Wall Street closed higher Thursday thanks to a rally in the tech sector. The S&P 500 ended just short of a record and the Nasdaq put on more than two percent.

New York traders were largely unmoved by a forecast-topping rise in US wholesale prices last month, which followed Wednesday’s hotter-than-expected consumer inflation data which dented hopes for another interest rate cut.