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Stocks retreat as Trump trade worries offset N.Korea hopes

Business | 2018-03-07 13:42:00
Stocks retreat as Trump trade worries offset N.Korea hopes
London (AFP)- Stock markets and the dollar jolted Wednesday as news that Donald Trump's top economics adviser had resigned revived trade war fears, while early excitement at North Korea's offer of denuclearisation talks fizzled out.

"Investors panicked in response to Gary Cohn's unexpected -- although not entirely surprising -- announcement that he's resigning from his post as Donald Trump's top economic adviser," said Fawad Razaqzada, analyst at Forex.com.

"The market's reaction suggests investors are now even more concerned that with one of Trump administration's strongest free trade advocates gone, that the US trade policy will head further into protectionist territory."

Investors already on edge over expected US interest rate rises have been rattled further since the US president last week unveiled plans for controversial tariffs on steel and aluminium imports as part of his "America First" agenda.

International Monetary Fund chief Christine Lagarde on Wednesday warned that a trade war would snuff out global growth.

Around 1200 GMT, London's benchmark FTSE 100 index was flat, as investors awaited a Brexit keynote speech due Wednesday from British finance minister Philip Hammond.

In the eurozone, Frankfurt's DAX 30 was also unchanged compared with Tuesday's closing level, while the Paris CAC 40 fell 0.4 percent, as official data showed that growth in the single currency area rose less than previously thought in 2017.

In Asia, stock markets slid despite Pyongyang's olive branch to South Korea and the US -- saying it was open to discussing its nuclear programme.

Seoul announced the two Koreas would hold a historic summit next month -- and that the North's leader Kim Jong Un was ready to suspend provocative missile and nuclear tests while sitting down for dialogue.

Trump, who has said the US would not talk unless Kim was prepared to give up his weapons, welcomed the breakthrough offer.

Elsewhere, oil prices dropped as markets awaited the release on Wednesday of weekly energy inventory levels in the United States.
AFP
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