Asia markets extend losses despite Wall Street gains

08-Aug-2019 Intellasia | AFP | 6:02 AM Print This Post

Asian markets largely extended their losses on Wednesday despite Wall Street registering strong gains as investors remained on edge over escalating US-China trade tensions.

The losses in Asia came despite a gain of more than one percent for US indices as Wall Street recovered from a multi-session losing streak that saw the Dow hit its lowest level this year.

Equities had tumbled Monday after Beijing allowed the yuan to slide sharply against the dollar following President Donald Trump’s announcement that he would impose 10 percent tariffs on another $300 billion in Chinese goods starting September 1.

But Beijing’s move to stabilise the yuan after it dropped below the key 7.0 per dollar threshold helped to ease fears of a currency war despite Washington formally branding China a “currency manipulator”.

“The move… to strengthen the yuan calmed markets after a drop on Monday. Emerging markets got some breathing room and rebounded,” said Edward Moya, senior market analyst at OANDA.

But he warned that “trade war concerns remain very much front of mind… at this point more details and statements from both sides are needed to inject calm into a volatile market”.

Tokyo shed 0.3 percent, Shanghai also dropped 0.3 percent and Seoul lost 0.4 percent.

But Hong Kong closed modestly higher, ending a week-long losing streak after spending much of the day in the red as investors remained tense over the US-China trade war.

Mumbai was flat after India’s central bank cut interest rates for the fourth time this yearin line with expectationsas New Delhi battles sluggish economic growth and record unemployment.

But other emerging markets saw gains, with Jakarta and Manila climbing more than one percent.

– Tensions spike –

European markets also rose in opening trade, with Frankfurt jumping 0.9 percent, London winning 0.4 percent and Paris up 0.5 percent.

US-China trade tensions have risen sharply since last week following Trump’s latest tariffs announcement, which would subject virtually all of the $660 billion in goods traded between the world’s two top economies to punitive duties.

The yuan’s slump fuelled speculation that Beijing was devaluing the currency to support exporters and offset the tariffs threat, infuriating Washington.

Multiple rounds of tit-for-tat tariffs between the two countries have already battered trade and raised fears for the health of the global economy.

Chinese and US negotiators are set to reconvene in Washington in early September for another round of talks after last week’s discussions in Shanghai, but expectations of a deal are low.

– Key figures around 0800 GMT –

TokyoNikkei 225: DOWN 0.3 percent at 20,516.56 (close)

Hong KongHang Seng: UP 0.1 percent at 25,997.03 (close)

ShanghaiComposite: DOWN 0.3 percent at 2,768.68 (close)

LondonFTSE 100: UP 0.4 percent at 7,202.46

Pound/dollar: UP at $1.2165 from $1.2163 at 2045 GMT

euro/pound: DOWN at 92.01 pence from 92.09 pence

euro/dollar: DOWN at $1.1189 from $1.1202

Dollar/yen: DOWN at 106.28 yen from 106.49 yen

Brent North Sea crude: DOWN 16 cents at $58.78 per barrel

West Texas Intermediate: DOWN five cents at $53.58 per barrel

New YorkDow: UP 1.2 percent at 26,029.52 (close)–finance.html


Category: FinanceAsia

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