London, March 7 (AFP/APP):European stock markets regained their poise Wednesday as a recovering dollar helped them reverse a sell-off prompted by the resignation of a key Trump advisor, but Wall Street opened lower amid fears of more US protectionism.
Asian and then European markets were earlier jolted by Gary Cohn's abrupt decision to step down, seen as increasing the likelihood of Donald Trump provoking a trade war, which also weighed on the greenback. Wall Street, which was closed when Cohn's departure was announced, posted losses at the opening bell.
“US stocks are moving noticeably lower in early action, with lingering concerns about the global trade impact of President Donald Trump's tariff plan being met with yesterday's resignation of the White House's top economic advisor Gary Cohn,” analysts at the Charles Schwab brokerage said.
Early excitement at North Korea's offer of denuclearisation talks helped European market sentiment, dealers said. “Investors panicked in response to Gary Cohn's unexpected — although not entirely surprising — announcement that he's resigning from his post as Donald Trump's top economic adviser,” said Fawad Razaqzada, analyst at Forex.com.
Free-trade advocate gone
“The market's reaction suggests investors are now even more concerned that with one of Trump administration's strongest free trade advocates gone, that the US trade policy will head further into protectionist territory.”
Razaqzada wondered whether markets were perhaps “overreacting” to the resignation, but investors had already been on edge over expected US interest rate rises, and rattled further since the US president last week unveiled plans for controversial tariffs on steel and aluminium imports as part of his “America First” agenda.
International Monetary Fund chief Christine Lagarde on Wednesday warned that a trade war would snuff out global growth. In Asia, stock markets slid despite Pyongyang's olive branch to South Korea and the US — saying it was open to discussing its nuclear programme.
Seoul announced the two Koreas would hold a historic summit next month — and that the North's leader Kim Jong Un was ready to suspend provocative missile and nuclear tests while sitting down for dialogue.
Trump, who has said the US would not talk unless Kim was prepared to give up his weapons, welcomed the breakthrough offer. Elsewhere, oil prices dropped as markets awaited the release on Wednesday of weekly energy inventory levels in the United States.
– Key figures around 1430 GMT –
London – FTSE 100: UP 0.2 percent at 7,158.83 points
Frankfurt – DAX 30: UP 0.6 percent at 12,185.83
Paris – CAC 40: DOWN 0.1 percent at 5,163.39
EURO STOXX 50: UP 0.2 percent at 3,362.86
New York – Dow: DOWN 0.8 percent at 24,694.17
Seoul – KOSPI: DOWN 0.4 percent at 2,401.82 (close)
Tokyo – Nikkei 225: DOWN 0.8 percent at 21,252.72 (close)
Hong Kong – Hang Seng: DOWN 1.0 percent at 30,196.92 (close)
Shanghai – Composite: DOWN 0.6 percent at 3,271.67 (close)
Oil – Brent North Sea: DOWN 19 cents at $65.60 per barrel
Oil – West Texas Intermediate: DOWN 23 cents at $62.37