An ongoing trade dispute is unlikely to be helped by a fresh US move against Huawei (FRED DUFOUR)

New York (AFP) – Equity markets on both sides of the Atlantic slid Monday as investors fretted over the fallout of a US crackdown on Chinese telecom giant Huawei amid the two countries’ worsening trade war.

The controversy over Huawei, which was effectively barred from the US market by President Donald Trump last week, took on new gravity after Google said on Sunday it was beginning to sever ties with Huawei. 

With the two countries already locked in months-long trade talks, the US action on Huawei is “a risky move,” said a note from Eurasia Group’s Ian Bremmer. “Progress between the two sides happened in part because of an absence of broader linkage.” 

Adding technology “makes it more painful to disagree… but also harder to publicly come to terms,” Bremmer said. “I still expect a climb-down from both sides. But it’s getting harder.” 

SEB Emerging Markets Strategist Per Hammarlund said that the latest development made it unlikely that Beijing and Washington would end their dispute in the run-up to next month’s G20 summit in Japan.

“Chances of a breakthrough before the G20 summit… are very small, with both sides likely reassessing their strategies following the failure to reach an agreement in Washington — and the move by the US to blacklist Huawei,” Hammarlund said.

– Fallout on tech –

The tech-rich Nasdaq was the big loser among US indices, falling 1.5 percent. 

Besides Google parent Alphabet, which lost 2.0 percent, US chip companies fell sharply, along with other tech companies, including Apple, which shed 3.1 percent.

Briefing.com attributed the pullback to “lingering concerns about Chinese retaliation against US tech companies following US scrutiny of Huawei Technologies.” 

Earlier, Eurozone heavyweights Frankfurt and Paris were each down around 1.5 percent at the close, while London held up better.

Among other markets, the Nikkei in Japan climbed 0.2 percent after government data showed Japan’s economy grew in the first quarter, defying expectations.

Mumbai equities and the rupee soared on the back of exit polls suggesting business-friendly Prime Minister Narendra Modi was on course to be re-elected.

Sydney stocks and the Australian dollar rallied after a shock win for the conservatives, while Japanese dealers were cheered by forecast-beating GDP data.

– Key figures around 2050 GMT –

New York – Dow: DOWN 0.3 percent at 25,679.90 (close)

New York – S&P 500: DOWN 0.7 percent at 2,840.23 (close)

New York – Nasdaq: DOWN 1.5 percent at 7,702.38 (close)

London – FTSE 100: DOWN 0.5 percent at 7,310.88 points (close)

Frankfurt – DAX 30: DOWN 1.6 percent at 12,041.29 (close)

Paris – CAC 40: DOWN 1.5 percent at 5,358.59 (close)

EURO STOXX 50: DOWN 1.6 percent at 3,369.78 (close)

Tokyo – Nikkei 225: UP 0.2 percent at 21,301.73 (close)

Hong Kong – Hang Seng: DOWN 0.6 percent at 27,787.61 (close)

Shanghai – Composite: DOWN 0.4 percent at 2,870.60 (close)

Pound/dollar: UP at $1.2725 from $1.2724 at 2100 GMT

Euro/pound: UP at 87.74 pence from 87.72 pence

Euro/dollar: UP at $1.1165 from $1.1158

Dollar/yen: DOWN at 110.04 yen from 110.08 yen 

Oil – Brent Crude: DOWN 24 cents at $71.97 per barrel

Oil – West Texas Intermediate: UP 34 cents at $63.10 per barrel

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.