Mon, 9th Jul 2018
The pound fell by 0.3 percent against the dollar shortly after trade opened this morning. European stocks also declined, mirroring weakness in Asia, as there were growing fears of punitive trade tariffs. The UK’s leading index fell by 64 points, or 0.9 percent, with miners being some of the worst affected.
Anglo American, BHP Billiton, Glencore, Antofagasta and Rio Tinto all shed more than two percent. Financial companies were also weak, with Barclays, Legal & General and London Stock Exchange all shedding approximately 1.6 percent. Barclays is reportedly considering relaunching its investment banking businesses in South Korea and South Africa.
One of the few strong performers of the day was Micro Focus. The company gained 4.4 percent after it announced that it had agreed to sell its Linux based OS, SUSE, to EQT Partners for $2.5 billion.
European markets are down after the European Commission threatened retaliatory tariffs against the US. Europe is faced with tariffs on cars, and has put its own duties on around $300 billion of US goods. This has brought back fears that there could be a global trade war. Chinese manufacturing growth data has also added to those fears. The Chinese economy appears to be slowing down, and this has amplified concerns about how a shock wave could spread through the global economy.
In Europe, there are concerns about the stability of the coalition that has so far kept Anegla Merkel in power. Merkel’s interior minister is threatening to resign over the party’s immigration policy.