Arms-makers and 'safe haven' bonds buck wider market sell-off

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The threat of a trade war sent many world stock markets broadly lower in choppy trading yesterday although arms manufacturers were boosted along with safe haven assets like the yen and government bonds, a day after US President Donald Trump announced tariffs on up to $60bn (€47bn) of Chinese goods.

President Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60bn of imports from China, although the measures have a 30-day consultation period before they take effect.

After another bruising week, a key gauge of world equity markets was broadly headed for its first quarterly loss since early 2016 as a spike in volatility, rising inflation and the spectre of a trade war spooked investors who had enjoyed a multi-year bull run.

"The equity markets are getting clobbered, which is not that surprising with fears of a trade war breaking out," said Paul Fage, a TD Securities emerging markets strategist.

The Dow Jones Industrial Average rose 134.85 points, or 0.56pc, to 24,092.74, the S&P 500 gained 3.17 points, or 0.12pc, to 2,646.86 and the Nasdaq Composite dropped 6.50 points, or 0.09pc, to 7,160.17.

Defence stocks including Lockheed Martin and General Dynamics rose after Trump signed a spending bill that will increase military spending despite an earlier threat to veto it.

European stocks fell broadly, with the Euro Stoxx index dropping 0.9pc and the Iseq in Dublin down slightly to 6,514.91.