Stock Market News: Stocks drop as Trump's trade war scares investors

The escalating trade tensions between the United States, China and many other major economies has a significant negative impact on the Chinese markets, with shares of the world's second largest economy suffering significant losses.

China's benchmark, the Shanghai Composite, fell 1.1% on Wednesday, leaving nursing losses of 22% since its most recent peak, thus extending the bear market that it reached at the beginning of the week. Bear markets are characterized by a fall of 20% or more from a peak.

The negative sentiment in Asia overnight – which also saw the Hong Kong Hang Seng fall by 1.7% and the Shenzhen Composite drop by 1.8% – has spread to Europe, and in the first time, all main stock exchanges in continental Europe suffered heavy losses. Most have since receded, and around noon BST (7:00 am ET), only IBEX from Spain is in negative territory.

Here is the scoreboard just before 12:15. TSB (7:15 am ET):

After collapsing when Trump announced plans to lift tariffs against trading partners such as China and the EU, the markets rebounded, reflecting the belief that the dispute should not be stalled. intensify further. Now, however, it seems that Trump is engaged in its tariff agenda and that markets, especially those in Asia, are worried.

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"Whatever soft growth the markets experienced on Tuesday was largely lost after the bell, the ongoing trade war continues to weigh on the minds of investors," said Connor Campbell, an analyst at Spreadex.

For China in particular, there is a steady stream of bad news. In addition to Chinese equities falling in a bear market, the country is also experiencing a significant drop in the price of its currency, the yuan, which has reached its lowest level in more than six months.

The USD / CNH, or the US dollar versus the quoted yuan, hit a high of 6.6105 before, leaving it at the highest level since December 20 last year.

An increase indicates that the US dollar is strengthening against the yuan.

Along with the escalating trade tensions between the United States and China, the yuan has been under pressure in recent months because of the weakening of Chinese economic data and diverging monetary policy between the PBOC and the US. the US Federal Reserve.