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Global Markets Tank as Fresh U.S.-China Tensions Begin

Global Markets Tank as Fresh U.S.-China Tensions Begin

European stock exchanges and oil dropped Monday as a spat between top U.S. delegates and China over the origin of the coronavirus fuelled fears of a new trade war, derailing a rebound in global markets.

Global Markets Tank as Fresh U.S.-China Tensions Begin

European markets opened down 2.5% with U.S. stock futures trading near 1% in the red.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 2.5%, pulled down by Hong Kong, where the Hang Seng returned from a two-session vacation with its greatest drop in six weeks.

U.S. Secretary of State Mike Pompeo stated Sunday there was “a significant amount of evidence” that the virus emerged from a laboratory in the central Chinese metropolis of Wuhan.

Pompeo didn’t present evidence or contend an earlier U.S. intelligence conclusion that the virus was not man-made.

An editorial in China’s Global Times stated he was bluffing and called on the U.S. to present its proof.

Simon Black, head of investment management at wealth administration firm Dolfin said traders had also been adjusting their forecasts over the depth of the economic damage inflicted by the pandemic.

Corporations listed on the pan-European STOXX 600 are currently expected to report a 40% decline in earnings in the second quarter.

Manufacturing activity in the eurozone collapsed last month as government-imposed constraints to stop the spread of the novel; coronavirus forced manufacturing plants to close and consumers to stay indoors, a survey showed on Monday.