World shares retreated on Friday following choppy trading on Wall Street, which saw more losses as investors assess US President Donald Trump's order imposing new tariffs on 68 countries and the European Union starting in seven days.
Trump's order, which pushed back the tariff deadline earlier set on August 1, has injected a new dose of uncertainty in an already uncertain process.
While the BSE Sensex shed 585.67 points or 0.72 per cent, Germany's Dax fell 1.5 per cent to 23,697.31 in early European trading and Britain’s FTSE 100 dropped 0.7 per cent to 9,068.97. In Paris, the CAC 40 shed 1.6 per cent to 7,647.56.
The future for S&P 500 was down 0.8 per cent and that for the Dow Jones Industrial Average was also 0.8 per cent lower. Japan's Nikkei 225 slid 0.7 per cent to 40,799.60, while South Korea's Kospi tumbled 3.9 per cent to 3,119.41. Hong Kong's Hang Seng index shed 1.1 per cent to 24,507.81, while the Shanghai Composite slipped 0.4 per cent to 3,559.95. Australia's S&P ASX 200 shed 0.9 per cent to 8,662 and Taiwan's TAIEX slid 0.5 per cent to 23,434.38.
“Trump's new tariff directive, signed behind closed doors just ahead of the August 1 deadline, slaps a new floor under global trade costs: a 10 per cent minimum rate for nearly all partners, with surcharges of 15 per cent or higher for surplus nations,” Stephen Innes of SPI Asset Management said in a commentary.
The S&P 500 fell 0.4 per cent, its third straight decline. The benchmark index, which is just below the record high it set Monday, notched a 2.2 per cent gain for the month of July and is up 7.8 per cent so far this year. The Dow Jones Industrial Average lost 0.7 per cent and the Nasdaq composite closed less than 0.1 per cent lower. Roughly 70 per cent of stocks in the S&P 500 lost ground, with health care companies accounting for the biggest drag on the market.
Healthcare stocks sank after the White House released letters asking big pharmaceutical companies to cut prices and make other changes in the next 60 days. Eli Lilly & Co. fell 2.6 per cent, UnitedHealth Group slid 6.2 per cent and Bristol-Myers Squibb dropped 5.8 per cent. Gains by some big technology stocks with hefty values helped temper the impact of the broader market decline.
Meta Platforms surged 11.3 per cent after the parent company of Facebook and Instagram crushed Wall Street’s sales and profit targets even as the company continues to pour billions of dollars into artificial intelligence.
Microsoft climbed 3.9 per cent after posting better results than analysts expected. The software pioneer also gave investors an encouraging update on its Azure cloud computing platform, which is a centrepiece of the company's artificial intelligence efforts.
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