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A finding by Central Bank of Kenya shows that current account deficit, which is the balance of foreign exchange inflows and outflows as a percentage of gross domestic product (GDP), narrowed to an estimated 4.6 percent of the GDP in 2019 from 5.0 percent in 2018/FILE


Global markets sink as trade tensions simmer before talks

The two-day trade talks in Washington have taken on extra significance since Donald Trump said he will hike tariffs on $200 billion of Chinese imports from Friday/AFP

LONDON, United Kingdom, May 9 – World stock markets sank again Thursday on heightened China-US tensions before make-or-break trade talks in Washington, dealers said.

The dollar and oil prices steadied.

The two-day gathering has taken on huge significance after US President Donald Trump threatened to more than double punitive tariffs on $200 billion of imports Friday, arguing that Beijing “broke” their previously agreed commitments on trade.

Chinese trade envoy Liu He returns to the bargaining table in the US capital later Thursday under a tense atmosphere with far-ranging ramifications for the world’s two biggest economies.

Beijing has rejected US accusations of backtracking and warned it would not “capitulate to any pressure” as the pair enter into eagerly-awaited negotiations.

– ‘Not holding out hope’ –
“Stocks have endured a major sell-off… as trade tensions between the US and China have ratcheted up,” said CMC Markets analyst David Madden.

“President Trump claims that China ‘broke the deal’, and traders have taken that as a sign that the relationship between Washington DC and Beijing is going to get worse.

“Trade discussions between the two sides will continue today, but investors are not holding out much hope,” Madden added.

In midday deals, London’s benchmark FTSE 100 index of major blue-chip companies was down 0.3 percent.

Frankfurt’s DAX 30 slid 0.7 percent, while the Paris CAC 40 shed 1.1 percent with sentiment hit also by disappointing earnings for ArcelorMittal.

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Shares in the world’s largest steel firm tanked 5.36 percent to 16.82 euros after it revealed that first-quarter net profits plunged on sliding steel prices.

In Asia on Thursday, Hong Kong stocks were hammered more than two percent while Shanghai ended 1.5 percent lower and Tokyo sank 0.9 percent.


Trump’s remarks have battered global equities and fuelled fears the economic superpowers — who appeared just last week to be nearing a deal — could become entangled in a brutal trade war with worldwide consequences.

For its part, Beijing said an escalation was “not in the interests of the two countries’ people” but warned it would impose “necessary countermeasures” if the tariffs were more than doubled Friday.

Fears of a worsening trade crisis sent many investors scurrying to haven assets like the yen and gold, dealers said.

“Global equities along with US stock futures continue to face pressure with time running out for U.S tariffs to escalate between the world’s two largest economies,” noted Oanda analyst Dean Popplewell.

“Safe haven trading dominates proceedings with yen, gold and sovereign debt climbing as investors continue to seek sanctuary.”

Key figures around 1100 GMT 

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London – FTSE 100: DOWN 0.3 percent at 7,249.44 points

Frankfurt – DAX 30: DOWN 0.7 percent at 12,093.80

Paris – CAC 40: DOWN 1.1 percent at 5,357.81

EURO STOXX 50: DOWN 1.0 percent at 3,382.57

Tokyo – Nikkei 225: DOWN 0.9 percent at 21,402.13 (close)

Hong Kong – Hang Seng: DOWN 2.4 percent at 28,311.07 (close)

Shanghai – Composite: DOWN 1.5 percent at 2,850.95 (close)

New York – Dow: FLAT at 25,967.33 (close)

Euro/dollar: DOWN at $1.1191 from $1.1192 at 2100 GMT

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Pound/dollar: DOWN at $1.2990 from $1.3006

Dollar/yen: DOWN at 109.87 yen from 110.10 yen

Oil – Brent Crude: DOWN two cents at $70.38 per barrel

Oil – West Texas Intermediate: DOWN four cents at $62.08

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