Stock Markets Extend Losses As Trump's Tariffs Hit Global Outlook

Donald Trump's trade war against key partners has fanned uncertainty among investors and raised concerns about the economic outlook AFP

Major stock markets extended losses on Friday on heightened concerns over the potential fallout from US President Donald Trump's tariff agenda.

European indices traded lower in late morning deals following some heavy falls in Asia and weakness on Thursday on Wall Street.

Stock markets across the globe retreated on Thursday after the Federal Reserve painted a gloomier picture for the US economy in the near future, even if Federal Reserve boss Jerome Powell downplayed the impact of tariffs.

The Bank of England and Bank of Japan this week have warned about economic uncertainty fuelled by Trump.

"Equity investors are back focusing on the uncertainty and negative impact that is likely to come from a trade war," National Australia Bank's Rodrigo Catril noted on Friday.

"Sentiment remains fragile with investors nervous and not sure whether to put on risk or take it off."

Shares in Hong Kong sank for a second day running after a blistering start to the year.

Chinese electric vehicle maker BYD dived more than eight percent following a report that the European Commission was conducting a foreign subsidy investigation into its plant in Hungary.

British Airways-owner IAG retreated 1.2 percent after the airline warned that the temporary closure of Heathrow airport, its main hub, would significantly affect operations.

Europe's busiest airport shut down early on Friday after a fire at a nearby substation supplying power to the sprawling facility west of London.

"This will clearly have a significant impact on our operation and our customers and we're working as quickly as possible to update them on their travel options for the next 24 hours and beyond," British Airways said in a statement.

Nike slid four percent in after-hours US trading after the athletic footwear and apparel giant reported falling quarterly revenue.

Unease about the outlook continues to push gold prices higher as investors seek a safe haven from the volatility.

The precious metal was sitting just below the record $3,057.49 per ounce (28.35 grammes) touched on Thursday.

Oil prices dropped despite rising tensions in the crude-rich Middle East.

London - FTSE 100: DOWN 0.5 percent at 8,661.32 points

Paris - CAC 40: DOWN 0.6 percent at 8,046.13

Frankfurt - DAX: DOWN 0.7 percent at 22,826.80

Tokyo - Nikkei 225: DOWN 0.2 percent at 37,677.06 (close)

Hong Kong - Hang Seng Index: DOWN 2.2 percent at 23,689.72 (close)

Shanghai - Composite: DOWN 1.3 percent at 3,364.83 (close)

New York - Dow: FLAT at 41,953.32 (close)

Euro/dollar: DOWN at $1.0840 from $1.0856 on Thursday