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Asian Equities Bow to Selling Pressure

By Investors Hub

Asian stocks succumbed to selling pressure on Wednesday after the U.S. proposed tariffs on an additional $200 billion worth of Chinese goods and China vowed to take countermeasures.

China’s Shanghai Composite Index plunged 50.42 points or 1.8 percent to 2,777.20 and the yuan drifted lower on worries the ongoing trade dispute could hurt economic growth. Hong Kong’s Hang Seng Index tumbled 370.56 points or 1.3 percent to 28,311.69.

Japanese shares ended lower to snap a three-day winning streak as fears about the global economic outlook due to the escalating trade war weighed on shippers and machinery makers.

The Nikkei 225 Index slumped 264.68 points or 1.2 percent to 21,932.21, while the broader Topix index closed 0.8 percent lower at 1,701.88.

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Mitsui OSK Lines, Nippon Yusen, Komatsu and Hitachi Construction Machinery lost 2-3 percent. Oil refiner Idemitsu Kosan soared 9 percent and Showa Shell Sekiyu jumped 7.9 percent to extend gains from the previous session after they agreed on a merger.

Core machine orders in Japan fell 3.7 percent sequentially in May, the Cabinet Office said, coming in at 907.9 billion yen. The headline figure compared to expectations for a decline of 4.9 percent following the 10.1 percent spike in April.

On a yearly basis, machine orders surged up 16.5 percent, topping forecasts for a 10.9 percent spike following the 9.6 percent jump in the previous month.

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Australian shares closed lower amid escalating trade tensions between the world’s two largest economies. The benchmark S&P/ASX 200 Index fell 42.50 points or 0.7 percent to 6,215.60, while the broader All Ordinaries Index ended down 42.60 points or 0.7 percent at 6,300.20.

Financials paced the decliners, with the big four banks closing down between half a percent and 0.8 percent. Mining heavyweights BHP Billiton and Rio Tinto lost 1-2 percent as traders pondered the trade war?s impact on commodity markets.

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Oil & gas producer Santos dropped 1.6 percent and Origin Energy tumbled 3.6 percent as oil prices fell in Asian trading after the U.S. said it would consider requests from some countries to be exempted from Iranian sanctions.

Meanwhile, retailer Woolworths advanced 1.4 percent after the latest survey from Westpac Bank showed its consumer confidence index jumped to the highest since late 2013 in July on growing optimism about the economy.

Theme park and cinema operator Village Roadshow remained in a trading halt for a second day to enable the completion of the institutional component of its $51 million capital raising.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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