Asian Stocks Decline as Trade Tensions Intensify

August 3, 2018
Asian Stocks Decline as Trade Tensions Intensify

By Investors Hub

Asian stocks fell across the board on Thursday as trade tensions intensified and the U.S. Federal Reserve signaled it remains on course to increase borrowing costs in September and likely again in December.

U.S. President Donald Trump has escalated his trade war with China, ordering his administration to consider raising the proposed tariff on $200 billion worth of Chinese imports to 25 percent from the 10 percent announced earlier.

A spokesperson for China’s Foreign Ministry accused the U.S. of “blackmail” and warned of inevitable countermeasures if the U.S. takes further escalatory steps.

Chinese stocks fell heavily, with rising trade tensions as well as speculation over even tighter property restrictions weighing on markets.

The benchmark Shanghai Composite Index plunged 56.51 points or 2 percent to close at 2,768.02, while Hong Kong’s Hang Seng Index gave up 626.18 points or 2.2 percent to close at 27,714.56.

Japanese shares tumbled as the yen strengthened on safe-haven demand after an escalation in the U.S.-China trade war. The Nikkei 225 Index slumped 234.17 points or 1 percent to 22,512.53, and the broader Topix Index closed 1 percent lower at 1,752.09.

Mitsui Chemicals, Mazda Motor, Kawasaki Kisen Kaisha, Komatsu and Sumitomo Heavy Industries declined 3-4 percent.

Kobe Steel plunged 9.6 percent and Furukawa Electric plummeted 10 percent after posting disappointing earnings results for the April-June quarter.

Australian shares fell as weaker commodity prices as well slightly disappointing first-half results from Rio Tinto pulled down mining stocks.

The benchmark S&P/ASX 200 Index dropped 34.80 points or 0.6 percent to 6,240.90, while the All Ordinaries Index ended down 34.40 points or 0.5 percent at 6,327.70.

Rio Tinto slumped 4.9 percent despite the company announcing an additional share buyback and dividend increase. BHP Billiton, Fortescue Metals Group and South32 lost 2-3 percent as the U.S. upped the ante in the trade war with China.

ANZ Bank and NAB shed around 0.6 percent, while Commonwealth and Westpac ended marginally lower.

In economic news, Australia’s trade surplus rose to A$1.87 billion in June from A$725 million in May, the Australian Bureau of Statistics revealed. Exports grew 3 percent from the previous month, while imports dropped 1 percent.

Dipo Olowookere

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.

Mr Olowookere can be reached via [email protected]

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