Futures lower on unsettled global markets as trade war fears escalate

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But, for India, macro risks are rising "even though the economy has some buffers", pointed out Radhika Rao, India Economist, DBS Bank, adding that in the immediate term "sentiments and the rupee remain susceptible to U.S. monetary policy trajectory and trade war concerns".

Mr Trump launched his protectionist agenda earlier this month - levying 25% tariffs on steel and 10% on aluminium - in a move created to save USA jobs but which critics fear could backfire and the Bank of England on Thursday warned risked damaging global growth. Dow futures fell 0.4 per cent to 23,859.00 and broader S&P/500 futures were down 0.3 per cent to 2,636.70.

Investors also sold some of the market's biggest recent winners.

Japan's Nikkei dropped 4.5%, while Australian stocks lost 1.9%, Hong Kong's Hang Seng was down 2.4%, Taiwan shares slid 1.6% and the South Korean market retreated nearly 3%.

Germany's Dax was down 2.26%, the French CAC 40 1.8% lower and Britain's FTSE 100 0.6% in the red. Online retailer Amazon slid $36.94, or 2.3 percent, to $1,544.92.

"China came back with proposed tariffs, but it was not almost as large as United States, and that's given people a little bit of semblance of hope that maybe this is not going to turn into a full-fledged trade war and maybe that there's room for negotiation", said Robert Pavlik, chief investment strategist at SlateStone Wealth in NY.

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On Thursday, investors fled stocks and bought bonds, which sent bond prices higher and yields lower. It was the 10-year note's biggest fall in yield since September 2017.

Gold has jumped to its highest since a market bloodbath in February, up one per cent to 1,342.

The dollar fell to 104.87 yen from 105.28 yen in late trading Thursday. The euro rose to $1.2367 from $1.2307.

Defence contractors including Raytheon and Lockheed Martin climbed after President Donald Trump signed a new government funding bill that provides increases in military spending.

But shares in Europe fared better, recovering from their worst levels after what analysts said was so far a less dramatic response from China than had been feared. While the tariffs might drive up their costs, they can pass those along to consumers by raising prices.

Meanwhile, US Commerce Secretary Wilbur Ross said Friday that US and South Korean officials were "relatively close" to reaching a deal on the steel and aluminium tariffs, with an announcement possible as early as next week. Brent crude, the worldwide standard for oil prices, added $1.54, or 2.2 percent, to $70.45 a barrel in London.

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The Russell 2000 index of smaller-company stocks sank 33.79 points, or 2.2 percent, to 1,510.08, but it's flat this month while the S&P 500 is down 4.6 percent.

"The larger part of China's strategy, though, is to position itself as the good guy in the global economy, protecting the rules of the game from Trump's lawless attacks", he said.

USA crude futures were up 0.25 percent at $64.46 per barrel after losing 1.3 percent on Thursday.

European stocks were down over 1% in early trade.

Wholesale gasoline rose 2 cents to $2.04 a gallon. Canadian National Railway Co. finished 2 per cent lower at $91.05, while Ritchie Bros Auctioneers Inc. fell 2.6 per cent to $38.88. Kelvin Chan contributed from Hong Kong and Pan Pylas contributed from London.

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