Global Stocks Drop Amid Concerns About Turkey

Mae Love
August 12, 2018

The Turkish lira briefly dropped almost 20 percent against the dollar after US President Donald Trump tweeted that he has authorized the doubling of tariffs on steel and aluminum imports from Turkey. Declining issues outnumbered advancers for a 1.85-to-1 ratio on the Nasdaq.

Russia's dollar-traded RTS index plunged over three percent, Brazil Bovespa index was losing 2.3 percent, and the Turkish Borsa Istanbul index saw a 5.4 percent sell-off.

Meanwhile, concerns over escalating trade conflict between the USA and China weighed on the trade-sensitive S&P 500 Industrials Index, which ended up losing 0.57% on the day.

The Dow Jones Industrial Average closed at 25,313.14 on Friday with a loss of -196.09 points or -0.77%.

The TSX's energy group rose 0.22 points, or 0.11 per cent, while the financials sector slipped 1.81 points, or 0.59 per cent.

"Problems in emerging markets are more important than ever because of the global growth engine that emerging markets have become", Peter Cecchini, chief market strategist at Cantor Fitzgerald in NY, wrote in a note.

The S&P 500 lost 7.07 points, or 0.2 percent.

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Chip stocks fell after Morgan Stanley downgraded the US semiconductor industry saying upside to estimates is hard to come by.

For the week, the Dow fell 0.6 per cent and the S&P 500 dipped 0.3 per cent.

Shares in trade-sensitive companies fell.

Tesla shares ended up 0.9 per cent. The number of Tesla shares sold short rebounded and are now higher than before Chief Executive Elon Musk on Tuesday proposed taking the electric auto maker private, according to data from financial technology and analytics firm S3 Partners.

The Consumer Price Index reported an annual increase of 2.9%.

S&P technology sector's 0.5 percent fall was led by chipmakers.

About 6.7 billion shares changing hands on US exchanges. Excluding the energy sector, the earnings growth estimate declines to 20.4 percent, according to Thomson Reuters.

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