Category archive: European

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US-China Trade War Sinks AUD, Global Stocks

The rising tension between US and China in trades has sent almost every major asset sinking, including oil, global stocks and Australian dollar.

The Trump administration announced that it will impose a 10 per cent tariff on $US200 billion worth of Chinese goods, including consumer items such as clothing and refrigerators. This decision followed China’s implementation of reciprocal tariffs on $US34 billion in US import goods.

The Dow Jones was down 0.9 per cent to 24,700, while the S&P and Nasdaq closed 0.7 per cent and 0.6 per cent lower respectively.

Chinese stocks declined by 1.6 per cent, while European markets such as Paris, London and Frankfurt lost between 1.3 and 1.5 per cent each. Japan’s Nikkei also dropped by 1.2 per cent, and Hong Kong’s Hang Seng dipped 1.3 per cent.

Gold fell 0.9 per cent to $US1,244.4 per ounce, while brent crude oil was down 6 per cent to $US74.17 per barrel.

Australian dollar plunged 1.2 per cent to 73.65 US cents, and is expected to continue declining. “We remain of the view that trade tensions are likely to get worse before they get better and as such we still see more downside risk for the Australian dollar,” NAB’s senior foreign exchange strategist Rodrigo Catril told the ABC.

Trump’s Cancellation of North Korea Summit Sends Markets Down

US and European stocks fell after US president Donald Trump cancelled a planned June summit with North Korean leader Kim Jong-un.

On Thursday morning, Trump cancelled the June 12 Singapore meeting, citing Pyongyang’s “open hostility” even though North Korea followed through on its pledge to destroy tunnels at its nuclear test site.

The Dow Jones fell 75.05 points (0.3 per cent) to finish at 24,811.76 while the S&P dipped by 5.53 points (0.2 per cent) to close at 2,727.76. Nasdaq also dropped 1.53 points (0.02 per cent) to 7,424.43.

European bourses had a sharp dip, with London and Frankfurt down by almost one per cent each.

The markets were also impacted by Trump’s order of investigation into vehicle part imports, which could lead to tariffs on foreign auto goods. US carmakers such as General Motors and Ford rose with 1.4 and 1.5 per cent respectively.

News: Unilever Shares Fell by 7 per cent Following Kraft Heinz’s Bid Pullout

Shares in Unilever have slumped by 7 per cent after Kraft Heinz withdrew its takeover bid of $US143 billion.

Kraft sought to buy Unilever, merging the two companies into a global consumer goods giant. However, a joint statement released on Sunday revealed that Kraft had “amicably agreed” to pull its offer.

Unilever’s London-listed shares, which rose by 13 per cent to set a record high when the bid was announced on Friday, were down 8 per cent after the withdrawal, while its Dutch-listed shares fell 7 per cent.

Despite the fall in stock prices, analysts and shareholders believed it was unlikely for Unilever to discuss another takeover deal. “A takeover at a later stage seems unlikely to me as Unilever will build their defense and sharpen their focus on profitability,” a major Unilever stockholder told Reuters.

Raphael Moreau, food analyst at Euromonitor said it was unlikely that any other company would be able to handle the acquisition of a company as big as Unilever. “Maybe they realised the price would have been too high to be feasible or that the corporate culture would be too different or too much of a hurdle and that created a long and convoluted process that would ultimately damage both companies,” said Moreau.