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GLOBAL MARKETS-Emerging markets lead global equities decline, sterling rises

Published 2018-09-05, 11:42 a/m
GLOBAL MARKETS-Emerging markets lead global equities decline, sterling rises
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* Emerging market stocks tumble, lead global stocks down

* U.S.-Canada talks, China tariffs deadline loom

* MSCI world stock index down for fourth day in a row

By Sinéad Carew

NEW YORK, Sept 5 (Reuters) - Stock markets around the world fell on Wednesday and declines in emerging markets accelerated as a deadline in the U.S.-China trade conflict loomed and U.S.-Canada trade talks were due to resume.

Weakness in emerging market currencies helped support the dollar, even as sterling rebounded off a two-week low on hopes of a breakthrough in Brexit talks. That optimism came after a Bloomberg report said Britain and Germany were prepared to drop a key sticking point in the Brexit negotiations. Treasury prices gained slightly as emerging market stock weakness boosted demand for low risk U.S. government debt, though pressure from a heavy corporate debt supply calendar limited gains. public comment period on the possibility of fresh U.S. tariffs on another $200 billion of Chinese goods ends on Thursday, with expectations that the additional levies will be imposed by U.S. President Donald Trump. United States and Canada will also resume discussions on Wednesday on revamping the North American Free Trade Agreement (NAFTA). Ottawa is not expected to back down on key issues despite Trump's threats to retaliate. still a cloud hanging over the market about whether we are actually going to see these (Chinese) tariffs take effect by the end of this week and continued concerns about the NAFTA deal," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The Dow Jones Industrial Average .DJI fell 9.67 points, or 0.04 percent, to 25,942.81, the S&P 500 .SPX lost 13.95 points, or 0.48 percent, to 2,882.77 and the Nasdaq Composite .IXIC dropped 109.57 points, or 1.35 percent, to 7,981.68.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.98 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.71 percent.

In Asia, expectations of U.S. tariffs sent the Shanghai SE Composite index .SSEC down 1.7 percent.

Emerging market stocks lost 1.73 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.8 percent lower, while Japan's Nikkei .N225 lost 0.51 percent.

Emerging market currencies showed a second day of declines, with a JPMorgan (NYSE:JPM) emerging market currency index .MIEM00000CUS falling 0.3 percent.

Sterling GBP= was last trading at $1.2897, up 0.33 percent on the day. against a basket of currencies, the dollar index .DXY fell 0.19 percent, with the euro EUR= up 0.26 percent to $1.1611.

"Until last month, people were focusing on U.S. company earnings but now they are looking closely at what's happening in emerging markets, at the trade war and the fact that the United States is likely to implement another wave of tariffs against China," said Christoph Barraud, an economist at Paris-based brokerage Market Securities.

"If you look at global growth, more and more signs are that it will slow in coming months."

Oil prices fell as a U.S. Gulf tropical storm weakened and moved away from oil-producing areas, and concern about weakening global demand added downward pressure. O/R

U.S. crude CLcv1 fell 1.2 percent to $69.03 per barrel and Brent LCOcv1 was last at $77.43, down 0.95 percent on the day.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Argentine peso, Turkish lira

https://reut.rs/2PFcQSJ Graphic: World FX rates in 2018

http://tmsnrt.rs/2egbfVh Major currencies - YTD performance

https://reut.rs/2oGepEn

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