London: World stock markets recovered a little on Monday following sharp losses the previous session, with traders remaining on edge over US President Donald Trump's controversial tariffs that have fanned fears of a trade war that could hammer the global economy according to experts.
The dollar fought back against the yen, seen as a haven currency in times of economic unrest.
"With equity markets so heavily beaten down last week, a rebound was a definite possibility, the only questions are how long it lasts and how far it goes," said Chris Beauchamp, chief market analyst at IG trading group.
The US move to impose $60 billion in levies on China -- claiming the country is breaching intellectual property rights -- sparked a rout of equities across the world, while Beijing warned it was "not afraid of a trade war".
US Treasury Secretary Steve Mnuchin said at the weekend that Trump was not ready to back down but added that he had "very productive conversations" with Chinese officials on the issue.
Trump's announcement came weeks after he unveiled tariffs on the import of steel and aluminium products as he presses on with his "America First" protectionist programme.
Beijing did not rule out cutting back its purchases of US Treasuries, which are crucial to keep the wheels of the world's top economy greased. China is the biggest buyer of Treasuries.
Wall Street's three main indices tumbled for a second successive day on Friday, and Asian investors -- who fled to the hills last week -- continued to sell on Monday before a late pullback.
"How China escalates will determine the pace of play, but Chinese retaliation so far has been more genial than initially thought, and they have made efforts for a diplomatic solution," said Stephen Innes, head of Asia-Pacific trading at OANDA.
Adding to the negative sentiment was news that Trump had installed a hardline hawk, John Bolton, as his national security adviser, stoking geopolitical worries.
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