Asian Markets Tumble as China Threatens to Impose Tariffs on US Goods

By Investors Hub

Asian stocks tumbled on Friday, the dollar weakened and safe-haven assets such as the gold and the Japanese yen strengthened after U.S. President Donald Trump announced tariffs on at least $50 billion worth of Chinese imports and China said it would impose tariffs on up to $3 billion worth of U.S. goods in retaliation.

China’s Shanghai Composite Index plunged 110.39 points or 3.4 percent to 3,153.09, while Hong Kong’s Hang Seng Index tumbled 761.76 points or 2.5 percent to 30,309.29.

Japanese shares closed near six-month lows as the rumblings of a global trade war shook financial markets and helped lift the yen to its highest level against the U.S. dollar in more than a year.

Investors were also spooked by the appointment of John Bolton, the former U.S. envoy to the UN, as Trump’s national security adviser.

The benchmark Nikkei 225 Index plummeted 974.13 points or 4.5 percent to 20,617.86, the lowest since October 5th. The broader Topix index closed 3.6 percent lower at 1,664.94.

Canon, Sony, Panasonic, Toyota and Honda lost 3-5 percent after the dollar breached below 105 yen for the first time since November of 2016.

Steelmakers Nippon Steel & Sumitomo Metal Corp and JFE Holdings fell around 4 percent each. Oil major Inpex Corp tumbled 4.5 percent and Japan Petroleum gave up 5.8 percent.

In economic news, the Ministry of Internal Affairs and Communications said that consumer prices in Japan were up 1.5 percent year-over-year in February. That was in line with expectations and up from 1.4 percent in January.

Australian shares slumped after Trump threatened Australia’s largest trading partner, China, with trade tariffs and China said it would “fight to the end” in trade war.

The benchmark S&P/ASX200 Index dove 116.50 points or 2 percent to 5,820.70, while the broader All Ordinaries Index ended down 114.20 points or 1.9 percent at 5,929.

Santos fell about 1 percent, Oil Search dropped 1.3 percent and Origin Energy shed 2.6 percent after crude oil prices fell more than 1 percent overnight.

The big four banks slumped 2-3 percent, while miners BHP Billiton, Fortescue Metals Group and Rio Tinto lost 3-4 percent.

Myer Holdings’ shares plummeted 10 percent after UBS analysts questioned the department store chain’s sustainability in its current form and major shareholder Solomon Lew questioned the company’s online sales figures reported in its recent half-year results.