Asian stock markets slumped and Europe mostly retreated Friday after President Donald Trump’s latest volley of tariffs, though London edged higher amid hopes of a US-UK trade deal.
Concerns about the global economy fuelled by fears of a global trade war, coupled with disappointing results this week from AI chip darling Nvidia, have caused an exit from investments seen as risky.
One of the most volatile assets currently is bitcoin, which dived below $80,000 on Friday for the first time since November.
Its low of $78,225.84 was more than 25 percent off the levels above $109,000 touched last month as Trump entered office.
“The countdown to Trump’s tariffs coming into force is now in the final few days and investors have got the jitters,” said Russ Mould, investment director at AJ Bell.
After a relatively upbeat month on markets, Trump dealt a fresh blow this week by confirming that 25 percent tariffs on products from Mexico and Canada would be effective from March 4.
He also warned the European Union that it could be hit with 25 percent duties.
But Trump has held out the prospect of a “great” trade deal with London that could see Britain avoid tariffs.
“We’re going to have a great trade agreement, one way or the other,” Trump said at a press conference Thursday with British Prime Minister Keir Starmer at the White House, adding that a new deal could come together “rather quickly”.
That contrasted with China, which hit back Friday at a warning of further US measures against its goods, saying they would “seriously impact dialogue” between the two countries on narcotics control.
“Tariffs are back in the crosshairs, and a market that had reduced its sensitivity to recent tariff headlines has had to reconsider that reaction function,” said Chris Weston, head of research at the broker Pepperstone.
China’s leadership is due to meet next week to map out plans for the economy this year, with Trump high on the agenda along with how to kickstart consumer activity and support the crucial property sector.
President Xi Jinping said Friday that the economy faced “numerous difficulties” in an article to be published ahead of the meeting.
On trading floors, the tech sector led losses ahead of the weekend pause.
Among the worst hit were chip firms, with Samsung and SK hynix dropping in Seoul, Advantest tanking almost nine percent in Tokyo, and Tokyo Electron shedding more than four percent.
Japanese tech investor SoftBank was also sharply lower.
The losses followed a painful day on Wall Street, where the Nasdaq dived more than three percent as US tech firms led by the so-called Magnificent 7 continued to suffer a pull-back.
That followed a long-running rally fuelled by investors’ voracious appetite for all things linked to artificial intelligence.
A number of weak economic readings have also stoked concerns that the US economy is slowing down, with many analysts warning that Trump’s plans to slash taxes, regulations and immigration will reignite inflation.
– Key figures around 1040 GMT –
London – FTSE 100: UP 0.2 percent at 8,771.09 points
Paris – CAC 40: DOWN 0.3 percent at 8,078.03
Frankfurt – DAX: DOWN 0.2 percent at 22,504.42
Tokyo – Nikkei 225: DOWN 2.9 percent at 37,155.50 (close)
Hong Kong – Hang Seng Index: DOWN 3.3 percent at 22,941.32 (close)
Shanghai – Composite: DOWN 1.9 percent at 3,370.52 (close)
New York – Dow: DOWN 0.5 percent at 43,239.50 (close)
Euro/dollar: UP at $1.0403 from $1.0398 on Thursday
Pound/dollar: UP at $1.2602 from $1.2600
Dollar/yen: UP at 150.30 from 149.79 yen
Euro/pound: UP at 82.54 pence from 82.52 pence
West Texas Intermediate: DOWN 1.1 percent at $69.59 per barrel
Brent North Sea Crude: DOWN 1.1 percent at $73.23 per barrel