Equities slide as Trump readies China response

LONDON: Global equities mostly sank on Friday as US President Donald Trump readied his response to Beijing´s controversial planned national security law for Hong Kong.

Trump has called a news conference to outline his response later Friday, as the heightened tensions overshadow increasing signs that the global coronavirus crisis is easing.

“Beijing has defied all US threats, and it has made it clear that China is going to have more control over Hong Kong because of a new security law,” said Think Markets analyst Naeem Aslam. “Donald Trump... appears poised to sign measures against China that would spur tensions further.”

In Europe, Frankfurt, London and Paris shed about one percent at the half-way point, following a further round of losses in Asia where Hong Kong slid 0.7 percent. The European single currency meanwhile zoomed on Friday to a two-month peak at $1.1141, as the dollar took a hit from souring China-US relations.

“European markets are looking to end the week on a more pessimistic tone, with fears over the impending US reaction to Chinese actions in Hong Kong driving traders to bank their profits ahead of the weekend,” noted IG analyst Joshua Mahony.

Trump told reporters at an Oval Office meeting that he was “not happy” with Beijing and the news conference would be about “what we´re doing with respect to China”, while giving no specifics.

The White House has already revoked the city´s special status, potentially opening the way for it to be stripped of key trading privileges such as lower tariffs than mainland China.

Relations between Washington and Beijing have deteriorated since the outbreak of the virus, which has killed more than 100,000 Americans, with Trump laying the blame at China´s door.

The row has fanned fears of a renewal of their trade war, which slammed the world economy and sent markets tumbling last year.

While there is a lot of nervousness, traders are drawing support from some parts of the world gradually returning to a semblance of normality as death and infection rates of coronavirus ease.

Bars, cafes, shops and beaches from Asia to the US are beginning to reopen, while Italy and England have set June dates for a resumption of their football seasons.

Renault was the biggest faller in Paris, with shares crashing 6.3 percent to 20.52 euros, after revealing a radical restructuring to save two billion euros ($2.2 billion) over three years.

The French carmaker will axe almost 15,000 jobs, including 4,600 at core operations in France, as it seeks to steer out of a cash crunch exacerbated by the coronavirus crisis.

The group is switching focus to electric vehicles as it seeks to restore competitiveness in a market reeling from slumping sales, after the Covid-19 pandemic forced millions of people into home confinement.