NEW YORK, Sept 7 — World equities were in a jittery mood yesterday as an emerging markets rout posed a major headache for investors, already on red alert over Washington's trade war with Beijing, dealers said.

In Europe, Frankfurt, London and Paris bourses all closed weaker, extending heady declines of more than two percent over the previous two sessions.

Wall Street also finished mostly lower, with weakness in the tech sector again weighing on the Nasdaq and S&P 500.

"A sense of doom and gloom lingered across financial markets today as contagion fears from the brutal emerging market sell-off rattled investor confidence,” said Lukman Otunuga, a research analyst at FXTM.

Earlier Asian bourses deepened their losses as concerns about contagion from emerging markets (EM) — centred on Argentina, Turkey and South Africa — frayed investor nerves, while sentiment was also dented by the possibility of further US tariffs on China.

The Argentine peso actually rallied yesterday against the US dollar as a spokesman for the International Monetary Fund described talks on a crisis loan package for the South American country as "very active.”

Meanwhile, India's rupee hit a new record low of 72 to the US dollar.

Memories of 1997

The turmoil has revived worries of a repeat from 1997, when a fall in the Thai currency mushroomed into a much broader Asian economic crisis.

"Emerging markets turmoil reflects concern about the impact of trade wars on growth, tightening monetary policy and a turn lower in EM growth,” added Kit Juckes, macro strategist at French bank Societe Generale.

"Turkey, South Africa and Argentina are all minor players in global markets but they are all countries with sizable current account deficits who are in danger of running into international funding problems.

"And eventually, contagion is bound to occur, taking volatility up in developed markets.”

Trump's trade rows meanwhile continue to play out, with a public consultation on his threatened tariffs on US$200 billion (RM829.2 billion) of Chinese goods expiring today.

Investors are keeping a nervous eye on Washington after the president said last month he wanted to impose the levies as soon as the deadline had passed.

Separately, talks between Washington and Ottawa on the revised North American Free Trade Agreement are continuing.

Updating reporters on efforts to keep Nafta 2.0 as a three-party trade deal, Canadian top diplomat Chrystia Freeland said US and Canadian technical officials worked through the night on a number of issues and there continues to be "goodwill on both sides.”

But she declined to give any details or say whether the discussions would continue into the weekend, saying only that "the work is continuing” and that she is focused on getting a good deal. — AFP