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Europe: Shares steady as world prepares for a trade war
[LONDON] European shares opened in positive territory on Friday as the trade dispute between the United States and China escalated further with US tariffs on US$34 billion in Chinese imports taking effect and China immediately vowing to retaliate.
The pan-European STOXX 600 index was up 0.2 per cent by 0724 GMT while Germany's exporter-heavy DAX rose only 0.1 per cent.
Chinese stock markets also rose in late trading after initial losses close to two-year lows in the morning session.
"We're in a typical 'buy the rumour, sell the news'," scenario, said Stephane Barbier de la Serre, strategist at Makor Capital Markets, when asked why markets were not falling giving the trade dispute was moving unequivocally towards a trade war.
According to Barbier de la Serre, many investors still want to believe that the confrontation with China is a negotiating posture by US President Donald Trump and that the feared worst-case scenario of a fall in global trade and output, is not likely to materialise.