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Asian Shares Close Lower on Tuesday

By Investors Hub

Asian stocks closed mostly lower on Tuesday as the initial euphoria over the U.S.-China truce on import tariffs subsided and investors wondered if a 90-day tariff truce was enough for the two countries to resolve their differences on a range of issues.

According to media reports, U.S. President Donald Trump has appointed Robert Lighthizer, one of his cabinet’s most strident trade hawks, to oversee the next round of trade negotiations with China.

Chinese stocks bucked the downtrend in the region, with China’s Shanghai Composite Index rising 11.16 points or 0.4 percent to 2,665.96. Hong Kong’s Hang Seng Index closed up 0.3 percent at 27,260.44.

China’s central bank chief said in an article in the China Finance magazine that the central bank would keep its monetary policy flexible and adjust it appropriately according to changes in the country’s economic situation.

Japanese shares fell on profit taking after a strong rally in the previous session. The Nikkei 225 Index slid from a two-week high to end the session down 538.71 points or 2.4 percent at 22,036.05. The broader Topix Index also closed 2.4 percent lower at 1,649.20.

Falling U.S. yields on expectations of a slower pace of rate hikes by the Federal Reserve pulled down financials, with Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Dai-ichi Life Holdings losing 2-3 percent.

Companies sensitive to China also fell, with Yaskawa Electric and Hitachi Construction Machinery tumbling 3-4 percent. Sharp Corp. plunged 5.7 percent on a Nikkei report that it has laid off more than 3,000 foreign workers in Japan.

Australian stocks also succumbed to profit taking after the previous session’s sharp jump. The benchmark S&P/ASX 200 Index fell 1 percent to 5,713.10 after climbing 1.8 percent on Monday. The broader All Ordinaries Index also closed 1 percent lower at 5,797.50.

Financials led the decliners, with the big four banks ending down between 0.9 percent and 1.4 percent. Grocery wholesaler Metcash slumped 7.2 percent to extend losses from the previous session after the company warned of tough times ahead in the supermarket sector. Wesfarmers lost 2.4 percent.

ResMed dropped 1 percent on news the sleep device manufacturer would acquire U.S.-based asthma and pulmonary specialist Propeller Health for $225 million.

In economic news, Australia posted a seasonally adjusted current account deficit of A$10.688 billion in the third quarter, official data showed. That missed expectations for a shortfall of A$10.2 billion following the upwardly revised A$12.056 billion deficit in the three months prior.

The Reserve Bank of Australia left its benchmark interest rate on hold at a record low of 1.5 percent, citing sluggish wage growth and low inflation. The central bank said that the low level of interest rates is continuing to support the Australian economy.

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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