Australia

The Australian share market is expected to open lower after a negative lead from the US where trade fears forced investors to dump energy and technology stocks.

The SPI200 futures contract was down 29 points, or 0.45 per cent, at 6,464.0 at 8am Sydney time, suggesting a fall for the benchmark S&P/ASX200 on Friday.

The Australian share market closed lower yesterday for the first time in seven days following losses by the mining, energy and financial sectors.

The benchmark S&P/ASX200 index finished 18.9 points, or 0.29 per cent, to 6,491.8 points on Thursday, while the broader All Ordinaries was down 13.8 points, or 0.21 per cent, to 6,584.3.

On Wall Street overnight, the Dow Jones Industrial Average was down 1.11 per cent, the S&P 500 was down 1.19 per cent and the tech-heavy Nasdaq Composite was down 1.58 per cent.

The Aussie dollar is buying 69.01 US cents from 68.71 US cents on Thursday.

Asia

China’s blue-chip stock index dropped to a three-month closing low on Thursday, as investors dumped technology shares amid worries a growing number of Chinese firms in the hi-tech sector could bear the brunt of an escalating trade war with the United States.

The blue-chip CSI300 index fell 1.8 per cent, to 3,583.96, the lowest closing level since February 22. The Shanghai Composite Index lost 1.4 per cent to 2,852.52.

Technology shares led the decline, with an index tracking the sector down 3.5 per cent.

Hong Kong stocks dropped to four-month lows on Thursday, dragged by technology shares, as worries mount that the Sino-US trade conflict could fast turn into a technology cold war and threaten global economic growth.

The Hang Seng index fell 1.6 per cent to 27,267.13, while the China Enterprises Index lost 1.9 per cent to 10,401.11.

The tech sell-off continue in Japan where the Nikkei share average ended 0.6 per cent lower at 21,151.14.

Europe

European shares sank on Thursday as the latest round of US-China trade friction and a soft set of business surveys sapped investors’ risk appetite, while pressure on British Prime Minister Theresa May to quit added to Brexit concerns.

The pan-European STOXX 600 index closed 1.4 per cent lower, with Germany’s traditionally trade-sensitive DAX down 1.8 per cent, while Italian shares slumped more than 2 per cent.

As investors worried the US-China trade feud was fast turning into a technology focused cold war, the latest evidence of its impact on growth came from Germany.

A survey on Thursday showed business morale in Germany deteriorated more than expected in May as confidence in the services sector worsened, suggesting Europe’s largest economy is losing steam.

Euro zone business growth was also weaker than expected in May, data showed.

Europe’s auto sector index, among the most exposed to trade tensions, fell nearly 3 per cent to an over three-month low, while energy stocks led losses with a 3.3 per cent fall, tracking oil prices lower.

In Italy, the banks index has slipped 20 per cent from mid-April peak, confirming that the battered sector is in bear market, amid renewed worries about a showdown between Rome and Brussels over the euro-zone’s No 3 economy’s budget.

London’s blue-chip FTSE 100 slumped 1.4 per cent and its exporter-heavy components shrugged off the benefit of a slide in the pound to four-month lows on Brexit woes.

May clung to power on Thursday after her final Brexit gambit backfired, overshadowing a European election that has shown a UK still riven over its divorce from the EU.

At the bottom of the STOXX 600 were shares of Royal Mail that hit record low as the threat of renationalisation took its toll.

Deutsche Bank also touched an all-time low. Its chief executive promised “tough cutbacks” at its underperforming investment bank as he battled to convince shareholders he can turn around Germany’s biggest lender.

Shares of Daimler, Commerzbank, trading ex-dividend, were also down sharply.

At the other end, Merlin Entertainments led gains on the benchmark, up 7.5 per cent after activist shareholder ValueAct urged the Madame Tussauds owner to go private and said the company could be valued about 20 per cent more than its current price.

North America

US stocks have slumped as investors dumped shares of companies in growth and cyclical sectors, with energy and technology leading declines, on fears that the escalating US-China trade war will stymie global economic growth.

Further fuelling trade fears among investors, Beijing said Washington must correct its "wrong actions" for trade talks to continue after the US blacklisted Huawei Technology last week.

Among S&P 500 sectors, only utilities and real estate, both considered defensive areas, registered gains as investors moved to safe-haven assets such as Treasuries. Stocks pared losses in the last hour of trading, but Wall Street's major indexes all ended more than 1 per cent lower on Thursday.

Shares of S&P 500 technology and industrial companies, two sectors that have been bellwethers of trade sentiment, fell 1.7 and 1.6 per cent, respectively. Shares of S&P 500 companies in the cyclical financial and energy sectors also tumbled, with the 3.1 per cent drop in energy shares leading losses among S&P 500 sectors.

A 5 per cent plunge in oil prices in response to a dampened outlook for demand impeded energy shares, while a drop in 10-year Treasury yields, which hit their lowest level since October 2017, held back financial shares.

Adding to the downbeat mood in markets, data from IHS Markit showed US manufacturing faltered in May, with new orders falling for the first time since August 2009.

The Dow Jones Industrial Average fell 286.14 points, or 1.11 per cent, to 25,490.47, the S&P 500 lost 34.03 points, or 1.19 per cent, to 2822.24 and the Nasdaq Composite dropped 122.56 points, or 1.58 per cent, to 7628.28.

Stocks succumbed to selling pressure in May after Washington and Beijing engaged in tit-for-tat tariffs and other retaliatory measures, with the S&P 500 on track to post its first monthly decline since the December sell-off.

Shares of NetApp tumbled 8.1 per cent, the biggest percentage drop on the S&P 500, after the data storage equipment maker forecast current-quarter profit and revenue below Wall Street estimates.

L Brands shares jumped 12.8 per cent after the owner of Victoria's Secret and Bath & Body Works reported better-than-expected quarterly earnings.