LONDON: Global
stock markets nervously traded sideways yesterday as investors all but gave up
hope that a trade war could be nearing its end. Fears over the stand-off
between the world's two biggest economies added to jitters over the state of
the world economy which had inflicted heavy losses on equities Wednesday,
including the worst one-day fall this year on Wall Street's Dow.

"Every time
investors find the strength to pick themselves up off the floor, the trade war
delivers another blow and knocks them down again," said Craig Erlam at
Oanda. "This morning that came in the form of reports that China is
threatening retaliation against Trump's tariffs that are due to come into force
on 1 September."

Wall Street
stocks clung to narrow gains early yesterday following mixed US economic data
in a choppy follow-up to the Dow's worst session of the year. US indices
briefly veered into negative territory shortly after the opening bell, but were
all positive after 20 minutes.  

The Dow Jones
Industrial Average stood at 25,529.18, up 0.2 percent. The blue-chip index lost
800 points, or more than three percent, on Wednesday. The broad-based S&P
500 added 0.3 percent at 2,847.58, while the tech-rich Nasdaq Composite Index
edged up 0.1 percent to 7,784.48.

Major US indices
plunged Wednesday after a key US bond benchmark raised recession worries amid
mushrooming fears of a global slowdown. Yesterday's tentative start to trading
came after CNBC reported that a Chinese official said it hoped to "meet
the US halfway" on trade, comments that were viewed by some investors as
conciliatory, even as other observers said the statement was not new.

The yield on the
10-year US Treasury bond slid on Wednesday below the yield on the two-year
note, an "inversion" that has been a reliable harbinger of recession
for decades. "The slew of negative news has seen a huge shake down in
global equity markets, and money has poured into government bonds," noted
David Madden, analyst at CMC Markets UK.

'More sinister'

The trade war has
hammered global demand while investment and retail sales have also slowed in
the world's second biggest economy. "Trade tensions have metastasized into
something more sinister by affecting global growth to such a large degree that
bond markets are pricing-in a high probability of a worldwide recession,"
warned Stephen Innes, managing partner at VM Markets.

Economists have
warned for months that trade tensions threatened investment and dampened global
sentiment, which was already suffering owing to fears over Brexit's impact on
Britain and Europe, where the German economy is showing signs of contraction.
The pound climbed against the dollar and euro as data showed British retail
sales rose unexpectedly by 0.2 percent in July.

"The UK's
retail data surprised the investors by posting an upbeat reading and traders
pushed the (pound) currency higher," said Naeem Aslam, chief market
analyst at Think Markets. He warned however that "there is no light at the
end of the Brexit tunnel" so far. - AFP