Tue, Jun 25, 2019 8:09 AM
Thu, May 16, 2019 11:11

Asian markets sink as Trump further stokes trade war fears


Asian markets mostly fell Thursday as Donald Trump’s ban preventing US companies from using foreign telecoms equipment jolted investors who saw it as targeting Chinese providers and risking another flare-up in an already tense trade war.

Asian markets mostly fell Thursday as Donald Trump’s ban preventing US companies from using foreign telecoms equipment jolted investors who saw it as targeting Chinese providers and risking another flare-up in an already tense trade war.

The president insisted the executive order, which he based on national security grounds, was not aimed at any particular country, but it is the latest move in a row that has seen Washington raise concerns about the spying threat posed by China’s Huawei.

The Trump administration has for months tried to persuade allies not to allow China a role in building next-generation 5G mobile networks, warning that doing so would result in restrictions on sharing of information with the United States.

The announcement comes as trade tensions between the economic superpowers are raising after the US hiked tariffs on $200 billion of Chinese goods last week, to which Beijing retaliated.

“Earlier, the US Commerce Department had added Huawei to a list of entities that prohibits them from acquiring US-made technology and components without a government license,” said OANDA senior market analyst Jeffrey Halley.

“If that’s not an escalation in trade tensions, then I don’t know what is.”

– Fed rate-cut talk –

Regional markets were mostly in negative territory in early trade. 

Hong Kong was down 0.3 percent, with ZTE, another Chinese telecoms equipment provider, shedding more than four percent.

Shanghai was off 0.2 percent while Tokyo finished the morning down 0.6 percent.

Singapore retreated 0.3 percent, Seoul sank 0.7 percent and Manila shed 0.8 percent. 

Taipei was also off, though Sydney edged up slightly and Wellington put on 0.6 percent.

Asia had been given a positive lead from Wall Street and Europe, where investors were cheered by reports that the White House was planning to delay tariffs on auto imports while it pursues agreements with key trading partners.

Also Wednesday, US Treasury Secretary Steven Mnuchin repeated to senators his expectation that US officials would meet their Chinese counterparts in Beijing to continue their trade talks.

The dollar fell against its major peers and most higher-yielding currencies, with speculation swirling that the Federal Reserve could cut interest rates to fend off the effects of the trade war and slowing economic growth. 

Such talk comes just months after some commentators had been predicting up to three hikes this year.

“Depending on how long this standoff with China lasts, that impacts growth for longer and might force the Fed’s hand,” Esty Dwek, at Natixis Investment Managers, told Bloomberg TV.

“I wouldn’t expect any big change in the short term, but the possibility of a cut much later in the year has risen.”

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.6 percent at 21,055.61 (break)

Hong Kong – Hang Seng: DOWN 0.3 percent at 28,193.24

Shanghai – Composite: DOWN 0.2 percent at 2,934.09

Euro/dollar: UP at $1.1208 from $1.1200 at 2050 GMT

Pound/dollar: UP at $1.2848 from $1.2840

Dollar/yen: DOWN at 109.42 yen from 109.58 yen

Oil – West Texas Intermediate: UP 26 cents at $62.28 per barrel

Oil – Brent Crude: UP 25 cents at $72.02 per barrel

New York – Dow: UP 0.5 percent at 25,648.02 (close)

London – FTSE 100: UP 0.8 percent at 7,296.95 (close) 

Shakib first Tiger to 1k World Cup runs 161,323 drug peddlers sued in 2018: Minister Provide division to ex-Sonagazi OC Moazzem: Court Tigers post 262 runs against Afghanistan Listening To Music May Help Ease Pain For Cancer Patients Tk 2.2 lakh crore loan defaulted in 20yrs: BB 100 companies to hunt graduates at career fair from Thursday Cabinet okays flag vessel draft bill High iron levels may help lower cholesterol Govt dismisses TIB report over promotion Foreign investment grew to 67.94 per cent last year ACC sues DIG Mizan, 3 other relatives 5 cocktails blasted near BNP’s Nayapaltan office Bangladesh asked to bat first after losing toss Iran denies being hit by US cyber attack Submit report on 458,369 unfit buses across Bangladesh: HC Trump to visit S Korea this week for summit with Moon Rail communications with Sylhet to resume by evening: Rail Secy Argentina beats Qatar to escape elimination at Copa America Daimler issues profit warning over diesel issues Future summers will 'smash' temperature records every year Huawei Mate X to launch in September, will run Android: Report 'Toy Story 4' dominates with $118 million debut Coalition: Yemen rebel attack on Saudi airport kills 1, wounds 7 Mexico tops Martinique 3-2 to reach Gold Cup quarterfinals Probe body formed over Kulaura train disaster Bogra 6 by-election underway Blow to Turkey's Erdogan as opposition wins big in Istanbul Police SI arrested with yaba found in his residence First-time minister hits the ground to tackle housing issues