Stock markets fall on trade war pessimism, oil rallies
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
* U.S./China trade dispute escalates
* Wall Street tumbles after Rosenstein said to resign
* Brexit row hurts sentiment
(Changes byline, dateline to NEW YORK; adds Wall Street open;
By Hilary Russ
NEW YORK, Sept 24 (Reuters) - Stock markets around the world
retreated on Monday amid concerns over the potential wider
impact of a trade spat between China and the United States,
while oil prices rallied to a four-year high after OPEC ignored
U.S. calls to raise supply.
Wall Street equities tumbled after the Axios news site
reported that U.S. Deputy Attorney General Rod Rosenstein had
verbally resigned to White House Chief of Staff John Kelly, in
anticipation of being fired by President Donald Trump.
Other media sites had similar reports.
The Dow Jones Industrial Average fell 142.46 points,
or 0.53 percent, to 26,601.04, the S&P 500 lost 9.7
points, or 0.33 percent, to 2,919.97 and the Nasdaq Composite
dropped 8.01 points, or 0.1 percent, to 7,978.95.
MSCI's gauge of stocks across the globe shed
U.S. Treasury yields across maturities briefly fell by
around two basis points after the report about Rosenstein, who
overseas the federal investigation into Russia's role in the
2016 U.S. election and had reportedly suggested secretly
Yields ticked back up, however. The benchmark 10-year notes
last fell 3/32 in price to yield 3.0796 percent,
from 3.068 percent late on Friday.
The benchmark index for euro zone blue chip stocks
retreated 0.62 percent, while the pan-European STOXX
600, which also includes stocks in Britain and outside
the European Union, was down 0.6 percent.
Europe had followed Asia lower, with MSCI's broadest index
of Asia-Pacific shares outside Japan closing 1.1
percent lower, while Japan's Nikkei rose 0.82 percent.
China and the United States, the world's two biggest
economies, imposed fresh tariffs on each other's goods on
Monday, showing no signs of backing down from an increasingly
bitter trade dispute that is expected to knock back global
"This is here to stay," said Adrien Dumas, a manager at
Mandarine Gestion in Paris, arguing that because trade is at the
core of the Trump administration's agenda, investors should
accept that the issue is unlikely to recede any time soon.
"It's a negative and it adds to other issues," he said,
pointing to stress in emerging markets or political risk in
Italy and Britain.
A worsening trade environment is also likely to exacerbate
diverging economic performance and policy rates between
different regions, Citi analysts said in a note on Monday.
"The U.S. economy is moving full steam ahead, bolstered by
pro-cyclical policies, while others are lagging," they said.
Brexit, or Britain's exit from the European Union, weighed
on sentiment. On Friday, British Prime Minister Theresa May said
talks with the EU had hit an impasse.
British opposition leader Jeremy Corbyn said on Sunday he
would support a second Brexit referendum if his Labour Party
backs the move, heaping more pressure on May, amid speculation
that she could opt to call a snap parliamentary election.
European Central Bank chief Mario Draghi said he expected a
vigorous pickup in euro zone inflation, backing moves toward
unwinding an ECB asset purchase program meant to stimulate the
economy. That drove the euro to more than a three-month
high against the dollar.
The dollar index, tracking it against a basket of
other major currencies, fell 0.18 percent.
Oil prices jumped more than 2 percent to a four-year high
after Saudi Arabia and Russia ruled out any immediate increase
in production despite calls by Trump for action to raise global
U.S. crude rose 1.95 percent to $72.16 per barrel
and Brent was last at $80.77, up 2.5 percent on the
(Additional reporting by Julien Ponthus and Christopher Johnson
in London, Shreyashi Sanyal in Bengaluru and Gertrude
Chavez-Dreyfuss in New York; Editing by Bernadette Baum)
First Published: 2018-09-24 02:08:48
Updated 2018-09-24 17:58:17
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