Global stocks slide amid trade tensions, Fed rate hike

Global stock markets fell on Thursday as investors braced for trade conflict between economic heavyweights United States and China. Beijing said it was prepared to defend its interests as the administration of President Donald Trump prepared to announce tariffs on imports from China.

Britain's FTSE 100 dropped 0.8 per cent to 6,986 ahead of a Bank of England monetary policy statement, in which it was expected to keep rates on hold. Germany's DAX lost 1.1 per cent to 12,172 and the CAC 40 in France shed 1.1 per cent to 5,181. Futures for the S&P 500 lost 0.6 per cent and Dow futures gave up 0.7 per cent, pointing to a downbeat start in Wall Street.

China's Commerce Ministry said it would take "all necessary measures" to defend China's interests if Trump targets China for allegedly stealing American technology or pressuring US companies to hand it over. The Trump administration was expected to impose trade sanctions on China, perhaps including restrictions on Chinese investment and tariffs on as much as $60 billion worth of Chinese products. A Foreign Ministry spokeswoman, Hua Chunying told reporters Thursday that Beijing hoped the US would "refrain from taking actions that are detrimental to both sides".

The Fed, headed by its new chairman, Jerome Powell, said the US economy and the job market continued to improve over the last two months and it still expects to raise interest rates three times this year. It said it might raise rates three more times next year instead of two.

Hong Kong's Hang Seng dropped 1.1 per cent to 31,071.05 and the Shanghai Composite index lost 0.5 per cent to 3,263.48. Japan's Nikkei 225 index gained 1.0 per cent to 21,591.99, while the Kospi in South Korea added 0.4 per cent to 2,496.02. Australia's S&P ASX 200 fell 0.2 per cent to 5,937.20. Shares were mixed in Southeast Asia.

Benchmark US crude shed seven cents to $65.10 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.63, or 2.6 per cent, on Wednesday. Brent crude, used to price international oils, shed 15 cents to $69.32 per barrel.

The dollar fell to ¥105.68 from ¥106.05. The euro fell to $1.2318 from $1.2340.

- AP