Rand, JSE down as China strikes back
- Asian and European stocks slipped on Monday.
- US president Donald Trump could expand duties to a further $325 billion of Chinese products after a tariff hike on Friday.
- China announced that it will hike tariffs on $60 billion worth of US imports.
Wall Street plummeted on Monday after China announced that it will hike tariffs on $60 billion worth of US imports, mostly agricultural goods, starting on June 1.
The Dow Jones Industrial Average started the day almost 3% down, with tech stocks worst hit. Apple was almost 5% lower.
Asian and European stocks also fell.
US President Donald Trump accused China of walking back agreed provisions in a draft trade agreement last week, claiming the Asian nation "broke the deal." Following unproductive talks in Washington last week, the Trump administration hiked tariffs from 10% to 25% on $200 billion of Chinese goods on Friday. It's reportedly preparing to expand tariffs to a further $325 billion of Chinese products if a deal isn't struck in the next three to four weeks, according to Bloomberg.
"The US sharply hiking tariffs on Chinese imports and China threatening to retaliate has thrown into doubt the possibility of the two sides reaching a deal," said Jasper Lawler, head of research at London Capital Group.
The mounting uncertainty is taking a toll on equity markets.
- By late afternoon, the JSE all-share index was down 0.6%, while the rand was 0.7% weaker at R14.29/$. Naspers and Richemont lost more than 2%.
- Asian equities closed lower. The Shanghai Composite slid 1.2% and Japan's Nikkei fell 0.8%.
- European stocks dropped. Germany's DAX was down 1.5%, and the Britain's FTSE 100 also lost more than a percent.
- Bitcoin is down 4% at $7,073 after rallying to an eight-month high over the weekend.
Receive a single WhatsApp every morning with all our latest news: click here.
Also from Business Insider South Africa:
- Plastic bags will be banned at some of SA's biggest malls, including Sandton City
- Vodacom is spending billions on 'SA’s cheapest data network' Rain, while its own data prices continue to plummet
- This SA property company is making a killing selling gravesites, with 'family plots' now going for up to R360,000
- Keanu Reeves is building high-end motorbikes – using wheels and parts from Joburg
- Beware: Anyone can record conversations they have with you – and then use it against you
- If Twitter was a country, the EFF would have beaten the ANC in the elections