Global Stocks Fall on North Korea, New Trump Trade Worries

New York, May 25 (AFP) Global stocks slid today, with persistent global trade worries compounded when Washington suddenly canceled a nuclear summit with North Korea.

Wall Street started the day in the red because after the US announced it would investigate auto imports on national security grounds, a move that could lead to yet more steep tariffs.

The Dow and S&P 500 rebounded off earlier lows but still finished down 0.3 per cent and 0.2 per cent, respectively, while the Nasdaq was flat. While share prices in Frankfurt and Paris started out higher on bargain-hunting, they also ended the day in negative territory, pulled down by a weaker showing in New York.

London ended the session 0.9 per cent lower, Paris slipped by 0.3 per cent and Frankfurt shed 0.9 per cent.

In a letter released by the White House, Trump informed Kim Jong Un he was cancelling their summit next month in Singapore, blaming North Korea's "anger" and "hostility" for the spectacular collapse of the historic event.

"There are two cases on which the market is really focused. It's trade negotiations and the geopolitical situation with North Korea," Tom Cahill of Ventura Wealth Management told AFP.

"Donald Trump just backed down on both."

After suffering an initial shock, US stocks recovered much of their losses. But Cahill said each day's lot of worrisome trade headlines could have a cumulative effect on the market.

"These conflicts are not dramatic one by one," he said. "But their accumulation will eventually undermine business confidence and growth." Trump's war on autos meant the DAX led the losses across Europe with BMW, Daimler and VW all down in excess of two percent, analysts said.

Trading was "rather muted... as traders digest the overall impact of a host of geopolitical events, including revival of US-China trade tensions, aggressive North Korea rhetoric and President Trump taking a swipe at auto equipment makers," said Accendo Markets analyst, Artjom Hatsaturjants.

In London, news retail sales unexpectedly rebounded in April, lifted the pound, which in turn weighed on share prices of multinationals that derive much of their earnings in dollars.

Most major Asian stock markets fell. Japan's Nikkei was the biggest loser, shedding more than one percent as the haven yen surged against the dollar. Asian stock markets had already fallen heavily today after Trump said he was not satisfied with talks aimed at averting a trade war with China. (AFP) AQS

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