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Global stocks drop as Trump revives trade fears

Global stocks mostly fell on Monday after US President Donald Trump sparked fears of a renewed trade war with China over its role in the coronavirus pandemic.

Key eurozone markets lost more than 3.5% on simmering US-China tensions, with Frankfurt and Paris tumbling after a long holiday weekend.

Meanwhile, Wall Street stocks shrugged off early weakness and ended in positive territory as more US states moved to reopen their economies.

Millions of Europeans also emerged from lockdown on Monday, with Italy, the continent’s hardest-hit country, leading the way out of its two-month coronavirus confinement.

But investors were rattled as the Trump administration stepped up its criticism of China over the coronavirus.

“President Trump is back beating the trade war drums… and increasing the odds of a significant volatility risk event as all roads lead back to trade and tariff,” said AxiCorp’s Stephen Innes.

“Rekindling a dormant US-China trade war will likely make any economic improvement exponentially more difficult. And ripping up the trade agreement will trigger a global equity market rout.”

Trump had hinted he could impose new tariffs on China over its handling of the virus outbreak, claiming he had seen evidence linking a Wuhan lab to the contagion. 

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