Global Stocks Sell-off Engulfs Asia Over Trade War Fears

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By Investors Hub

Asian stocks joined a global sell-off on Friday after President Donald Trump vowed to impose tariffs on steel and aluminum imports, sparking fears of a trade war. Concerns over a faster pace of interest rate increases in the U.S. also kept investors nervous.

China’s Shanghai Composite Index dropped 19.18 points or 0.6 percent to 3,254.58 and Hong Kong’s Hang Seng Index plunged 460.80 points or 1.5 percent to 30,583.45 as investors looked ahead to an upcoming session of the National People’s Congress starting next week in Beijing. The gathering of 3,000-plus delegates is expected to set the tone for the year’s development plans.

Japanese shares tumbled amid a stronger yen as investors fretted about a potential trade war and the prospect of the ECB and Bank of Japan exiting extraordinary stimulus.

The Nikkei 225 Index slumped 542.83 points or 2.5 percent to 21,181.64, the lowest closing level since February 14th. The index fell 3.2 percent for the week. The broader Topix Index closed 1.8 percent lower at 1,708.34, dragged down by steel and aluminum companies.

Exporters Sony, Canon and Panasonic fell 1-2 percent as the yen strengthened. Steel makers Nisshin Steel, Kobe Steel and JFE Holdings all fell around 3 percent, while automakers Toyota Motor, Honda Motor and Mazda Motor lost 2-4 percent on worries that higher tariffs could boost their costs.

In economic news, Japanese core consumer inflation rose at the fastest pace in nearly three years in February, while the jobless rate hit its lowest level in nearly 25 years in a sign that the labor market is tightening.

Australian shares extended losses for the third straight session, dragged down by miners after Trump said the U.S. would impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum.

The benchmark S&P/ASX 200 Index dropped 44.40 points or 0.7 percent to 5,928.90, while the broader All Ordinaries Index ended down 47.30 points or 0.8 percent at 6,028.40.

Miners BHP Billiton, Rio Tinto and Fortescue Metals Group fell between 0.8 percent and 1.6 percent. BlueScope Steel rose 0.8 percent on expectations that its North American operations will benefit from the tariffs announced by Trump.

Woolworths shed 0.6 percent after the ACCC said it would take the company to the federal court, accusing it of incorrectly labeling its ‘W Select eco’ branded disposable picnic products as biodegradable.

Meanwhile, gold miner Newcrest gained over 1 percent and Regis Resources jumped more than 2 percent as gold prices rebounded from two-month lows.

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