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Global stocks slip, bonds rally as U.S.-China trade fears grow

Reuters Business 08 May 2019 12:38

TOKYO (Reuters) - Asian equities tracked Wall Street’s slide on Wednesday as the latest developments in the U.S.-China trade conflict fanned fresh fears about global growth, driving support for safe-haven government bonds.

FILE PHOTO: A man walks in front of a screen showing today's movements of Nikkei share average outside a brokerage in Tokyo, Japan, June 2, 2016. REUTERS/Issei Kato/File Photo

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, stooping to its lowest level since late March.

Australian stocks declined 0.35 percent, South Korea’s KOSPI fell 1 percent and Japan’s Nikkei was down 1.5 percent.

Wall Street stocks slid on Tuesday, with the S&P 500 losing 1.65 percent and the Dow shedding 1.8 percent on the U.S.-China trade concerns.[.N]

Global stocks had a rocky start to the week after Washington on Monday accused Beijing of backtracking from commitments made during trade negotiations. That followed President Donald Trump’s unexpected statement on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.

“From an equity market perspective, the immediate focus is on the two-day talks scheduled to take place between the U.S. and Chinese officials,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

Government bond prices surged and their yields slid sharply as investor panic took a toll on growth asset markets.

In currency markets, the dollar struggled at 110.25 yen after slipping to a six-week low of 110.17 overnight.

The euro was little changed at $1.1191 after ending the previous day nearly flat.

The Aussie gained 0.35 percent the previous day after the Reserve Bank of Australia defied expectations for an interest rate cut, keeping rates unchanged at 1.5 percent.

Crude oil prices had dropped as renewed U.S.-China trade worries stoked concerns of slower global growth crimping demand for commodities. Expectations that U.S. crude stockpiles could hit fresh 19-month highs also weighed on oil. [O/R]

Editing by Sam Holmes

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United StatesJapanTOKYOReutersPresident Donald Trump
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