LONDON, May 31 (NNN-AGENCIES) — European and Asian stocks unravelled Friday, resuming a midweek slump, with investors spooked by a ratcheting up of trade war clouds after US President Donald Trump announced tariffs on all Mexican imports.
The biggest faller among Europe’s leading indices was Frankfurt, down a hefty 1.8 percent in midday deals.
Tokyo’s main stocks index meanwhile tumbled 1.6 percent by the close as the yen rallied against the dollar, making Japanese exports more expensive.
The dollar hit a six-month low at 19.76 Mexican pesos.
Oil prices meanwhile dived to the lowest levels since early March on Trump’s intervention over Mexico and after a smaller-than-expected drop in US crude supplies, traders said.
Trump on Thursday kick-started the process of ratifying the new North American trade pact, but he has now put the accord at risk, according to experts.
Trump’s Twitter announcement of a five percent tariff on all goods from Mexico starting June 10 was aimed at tackling “illegal migrants” crossing the border into the US.
Mexico’s under-secretary for North American affairs called the move “disastrous” and vowed to retaliate.
Carmakers were among the hardest hit by Trump’s announcement, with shares in Mazda plummeting 7.1 percent, Nissan tumbling 5.3 percent, Renault shedding 4.6 percent and Volkswagen losing 3.6 percent.
Trump’s action comes amid a protracted trade war between the United States and China. — NNN-AGENCIES
