World stocks advance as investors expect US, China to negotiate after all

World stocks edged higher on Thursday as investors used signs of an easing of Sino-U.S. trade tensions to dip back into riskier assets.

The MSCI world equity index, which tracks shares in 47 countries, climbed 0.4 percent, while shares in Europe jumped 1.6 percent to a two-week high.

Cyclical sectors including basic resources, autos and banks, hit particularly hard over the past two sessions in Europe, led gains.

Sentiment was lifted as Washington expressed a willingness to negotiate, after proposed U.S. tariffs on $50 billion of Chinese goods prompted swift retaliation from Beijing.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, a day after it hit its lowest in almost two months.

Japan's Nikkei ended 1.5 percent higher. Markets in mainland China, Hong Kong and Taiwan were closed for the Tomb Sweeping Day holiday on Thursday.

Car makers to whiskey blenders: Winners & losers of US-China trade war

China on Wednesday hit back at US President Donald Trump's plan to impose tariffs on $50 billion of Chinese imports by proposing additional tariffs of 25 per cent on 106 categories of US goods, including soybeans, autos, chemicals and some types of aircraft.

The trade tensions brewing between the world's two largest economies hit global markets, with shares of industrial companies with exposure to Chinese markets, such as Boeing Co and Deere & Co, among the hardest hit.

The following are some of the possible winners and losers among US companies and sectors:

AUTO COMPANIES:

* US automaker General Motors Co urged the two countries to engage in constructive dialogue over trade. The company's stock fell as much as 3 per cent before reversing course to close nearly 3 per cent higher.

* GM rival Ford Motor Co also lost as much as 3 per cent before rebounding to close 1.6 per cent higher while electric carmaker Tesla Inc , which depends on China for 17 per cent of its revenue, fell as much as 5.8 per cent before retracing losses to end up over 7.2 per cent. Shares of Fiat Chrysler fell as much as 3.4 per cent before recovering to end up nearly 2 per cent.

Trump's trade war and the $470 billion hit to the global economy

A full-blown trade war could cost the global economy $470 billion, according to Bloomberg Economics.
The U. S. decision to slap tariffs on steel and aluminum may just be the beginning, with President Donald Trump warning of more levies and other economies promising to respond. Cecilia Malmstrom, the European Union’s trade chief, vowed on Monday to “stand up to bullies.”

In a scenario where the U. S. implements a 10 percent levy on imports and the rest of the world retaliates, analysis by Bloomberg Economics published Monday says the global economy would be 0.5 percent smaller by 2020 than it would have been without tariffs. According to economists Jamie Murray and Tom Orlik, that’s an extreme scenario, “but it’s no longer an impossible one.”

They see the move rippling through the world economy in a number of ways, starting with faster inflation that dents U. S. consumer demand, which in turn hurts other economies’ exports. Retaliation would see the inflation shock replicated in other nations, with goods substitution hitting

Wall Street down even as US steel stocks jump on tariff expectations

Wall Street's main indexes fell on Thursday as industrial stocks, including heavyweights Boeing and Caterpillar, took a beating on fears that potential tariffs on steel imports could hit profits.

US President Donald Trump tweeted on Thursday that the US steel and aluminum industries need "free, fair and smart trade". CNBC reported that Trump will make an announcement on tariffs at 11 a.m. ET (1600 GMT).

Trump has vowed to take steps to crack down on imports of steel and aluminum and has been considering imposing hefty tariffs or quotas on imports of the metals from China and other countries under a national security law.
"I think the industrials are down as they use a lot of steel, and the uncertainty of what the tariff announcement could mean for them," said Ryan Detrick, Senior Market Strategist for LPL Financial.