World stock markets fall for sixth day

Italy’s political crisis and renewed trade war fears sent world stocks lower for the sixth day in a row, though hopes that Italy could avoid a new election helped European markets stage a mini-bounce from one of their worst selloffs in years.

 Investors have in recent days scurried for assets such as US and German bonds or the Japanese yen, spooked by the possibility that Italy, the third-biggest eurozone economy, could deliver a bigger boost to eurosceptic parties in a snap election that sources said could be held by end-July.

Equity futures signalled a stronger open on Wall Street, after Tuesday’s harsh session which saw all three US indexes lose between 0.5-1.2pc, led by financial sector stocks.

Asian markets, however, remained under pressure, with an index of non-Japanese Asian stocks, hurt also by news that the United States was pressing ahead with tariffs and restrictions on investments by Chinese companies. Beijing meanwhile said it was ready to fight back if Washington ignited a trade war.

Japan’s Nikkei sold off 1.5pc to a six-week low while Shanghai shares also dropped 1.4pc. Trade-sensitive emerging equities fell 1.2pc to 5-1/2-month lows. Emerging markets are also suffering from the dollar’s renewed surge since mid-April, with Indonesia raising interest rates for the second time in two weeks to support the rupiah currency.