In This Article:
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Shanghai shares skid as Trump targets Huawei, Europe lower
* Asia index ex-Japan hits 15-week trough
* Yen edges higher as mood turns risk averse
* Bitcoin suddenly tumbles, then claws back losses
* Oil waits for OPEC+ output signals
* World FX rates in 2019 http://tmsnrt.rs/2egbfVh
*
By Marc Jones
LONDON, May 17 (Reuters) - World share markets suffered a fresh bout of risk aversion on Friday after tough words on trade from China, while bets on a new pro-Brexit leader in Britain whipped the pound towards its worst week since October.
Europe's bourses slipped 0.6% early on that seemed a minor blip after what had happened in Asia.
Shanghai stocks finished 2.5% in the red and the yuan hit its weakest in nearly five months amid growing fallout from President Donald Trump's move to block China's Huawei Technologies from buying vital American technology.
On Friday, the Communist Party's People's Daily used a front page commentary to evoke the patriotic spirit of past wars, saying the trade war would never bring China down.
In terms of how the trade conflict plays out, "the next fortnight will be very, very important," UniCredit strategist Kiran Kowshik said.
"Chinese counter-tariffs are due on June 1 and if those get effective, I think markets will price in the risk of the U.S. imposing its additional $300 billion of tariffs ahead of the G20 meeting (near the end of June)."
The drop in the yuan saw it ease past 6.9400 per dollar in the offshore market for the first time since November 2018.
Its slide has been steepening in recent days. Sources in China told Reuters the central bank would intervene to ensure it did not weaken past 7 to the dollar in the near term.
While breaking 7 could reduce some of the effects of U.S. tariff increases, it could hit confidence and trigger fund outflows, one of the sources said.
MSCI's broadest index of Asia-Pacific shares outside Japan was at 15-week lows and down 2.6% for the week at the end of trading.
Japan's Nikkei did manage to bounce 0.9%, while the main Australian index climbed to an 11-year peak as higher commodity prices boosted miners.
In Europe, Germany's exporter-heavy DAX fell the most, auto stocks lost as much as 1.6% and E-Mini futures for the S&P 500 shed 0.35% ahead of Wall Street trading.
Sentiment had been briefly soothed on Thursday by better U.S. economic news, with housing starts surprisingly strong and a welcome pickup in the Philadelphia Federal Reserve's manufacturing survey.
Upbeat results from Walmart burnished the outlook for retail spending, though the chain also warned that tariffs would raise prices for U.S. consumers.