Global stocks recover poise after tariff-related turbulence

Global stock markets recovered their poise Monday after fears of a trade war prompted volatile trading at the end of last week. Italian stocks underperformed their peers in Europe, though, after Sunday's election showed rising support for populist parties but no one grouping able to govern on its own.

KEEPING SCORE: In Europe, France's CAC 40 was up 0.3 percent at 5,150 while Germany's DAX rose 0.6 percent to 11,985. Britain's FTSE 100 advanced 0.2 percent to 7,083. However, Italy's benchmark FTSE MIB sank 1.3 percent to 21,630. Wall Street was poised to open lower with Dow futures and the broader S&P 500 futures down 0.2 percent.

TRUMP TARIFFS: The mood in markets was calm following last Friday's turbulence in the wake of U.S. President Donald Trump's revelation that he intended to slap tariffs on aluminum and steel imports. That prompted others to warn of retaliatory measures, which stoked fears of a potential trade war. Trump has not backed down since, and even threatened to slap tariffs on European cars.

ANALYST TAKE: "There is a real possibility that a trade war could unfold which doesn't work to anyone's benefit," said Craig Erlam, senior market analyst at OANDA. "The prospect of this rattled markets on Friday but this didn't last long and U.S. equities quickly bounced back, with the S&P 500 ending the day half a percentage point higher. European stocks have been playing catch up at the start of the week, although automakers continue to struggle after Trump's threats."

ITALIAN VOTE: Italian stocks lost ground Monday, but not by much, after an election which saw no single party or bloc emerge with enough support to win a majority in Parliament. That sets the stage for extended political uncertainty. Preliminary results released by Italy's interior ministry showed the center-right coalition winning about 37 percent of the parliamentary vote and the 5-Star Movement getting about 32 percent, with the center-left coalition far behind with 23 percent.

THE QUOTE: "In these circumstances, it is reasonable for market participants to wait for further political clarity at the current juncture," said Lee Hardman, currency analyst at MUFG. "The limited euro sell-off so far also reflects our belief that the developments are unlikely to materially undermine economic growth and financial stability in the eurozone." The euro was unchanged at $1.2310.

CHINA CONGRESS: Beijing set an annual growth target for the world's No. 2 economy of "around 6.5 percent" for 2018. Premier Li Keqiang announced that at the opening of the annual legislative session. That's down from a 6.9 percent expansion last year, but still robust. Li also outlined plans to forge ahead with an overhaul of state industry, ramp up military spending and pursue advanced technology.

ASIAN SCORECARD: Japan's benchmark Nikkei 225 index lost 0.7 percent to close at 21,042.09 and South Korea's Kospi slipped 1.1 percent to end at 2,375.06. Hong Kong's Hang Seng tumbled 2.3 percent to 29,886.39 but the Shanghai Composite in mainland China recouped losses, rising in the final minutes of trading to edge 0.1 percent higher to 3,256.93. Australia's S&P/ASX 200 fell 0.6 percent to 5,895.00..

ENERGY: Benchmark U.S. crude rose 12 cents to $61.37 a barrel in electronic trading on the New York Mercantile Exchange in New York while Brent crude, the international standard, rose 6 cents to $64.43 a barrel.