BANGKOK (AP) — Shares rebounded in Europe on Tuesday after logging moderate losses in Asia as China and the U.S. ratcheted up their tariffs battle.
The FTSE 100 in Britain surged 0.8% to 7,220.92, while France's CAC 40 advanced 1.1% to 5,319.22. Germany's DAX advanced 0.5% to 11,933.20. Futures augured an upbeat start on Wall Street, with the contract for the Dow Jones Industrial Average up 0.6% at 25,438.00 and that for the S&P 500 adding 0.7% to 2,827.50.
Investors already rattled by mounting tensions between Beijing and Washington got an extra jolt when China announced late Monday that it was raising tariffs on $60 billion of imports from the United States in retaliation for the Trump administration's latest hike in import taxes on Chinese exports.
"A clear hardening of attitudes, with state media blaring that China 'will fight to the end,' has stirred concerns of a protracted and widening trade war," Mizuho Bank said in a commentary.
Still, since Beijing's tariff increases only take effect on June 1 and those raised by Washington apply only to goods shipped after May 10, which will take a couple weeks or more to reach the U.S., there is still time available to find a compromise in the festering dispute over Chinese efforts to gain a lead in advanced technologies through means that the Trump administration says are unfair and violate world trade rules.
Asian shares were mostly lower.
The Shanghai Composite index slipped 0.2% to 2,883.61 while Japan's Nikkei 225 gave up 0.6% to 21,067.23. The Hang Seng index in Hong Kong, reopening after a market holiday on Monday, sank 1.5% to 28,122.02. The S&P ASX 200 in Australia dropped 0.9% to 6,238.40.
Elsewhere in Asia, South Korea's Kospi climbed 0.2% to 2,082.83 and India's Sensex added 0.6% to 37,318.53. Shares fell in Taiwan and Southeast Asia.
The Dow Jones Industrial Average plunged more than 600 points on Monday and the benchmark S&P 500 index suffered its biggest loss since January. The sell-off extended the market's slide into a second week and helped erased the market's gains from April.
Hopes the world's two largest economies were on track to resolve their dispute over trade and technology had helped push the market to its best yearly start in decades. But that has given way to concern that a full-blown trade war could crimp what is otherwise a mostly healthy economy.
Trade talks between the U.S. and China concluded Friday with no agreement and with the U.S. increasing import tariffs on $200 billion of Chinese goods to 25% from 10%. Officials also said they were preparing to expand tariffs to cover another $300 billion of goods.
Another sign of investor jitters, the VIX index, which measures how much volatility the market expects in the future, spiked 28.1% on Monday.
Energy futures recovered, with U.S. crude gaining 29 cents to $61.33 per barrel in electronic trading on the New York Mercantile Exchange. It lost 62 cents or 1% to settle at $61.04 per barrel on Monday. Brent crude, the international standard, picked up 57 cents to $70.80 per barrel.
The dollar rose to 109.69 Japanese yen from 109.31 yen on Monday. The euro rose to $1.1228 from $1.1223.