Business canada

Asian stocks follow Wall Street lower as trade war worsens

BEIJING — Asian stocks followed Wall Street lower on Tuesday after China let its currency sink and halted purchases of U.S. farm goods, fueling fears Beijing’s trade war with President Donald Trump will harm the global economy.

China’s main index lost 2.5% and Tokyo fell 2%. Markets in Hong Kong, Sydney and Seoul also retreated.

Beijing allowed its yuan to fall past the politically sensitive level of seven to the dollar on Monday following Trump’s threat last week to extend punitive tariffs to an additional $300 billion of Chinese imports. Also, the Ministry of Commerce announced it was suspending promised purchases of American farm products.

On Tuesday, the yuan fell further to 7.052 to the dollar in early trading. That came after the U.S. Treasury Department officially labeled Beijing a currency manipulator, a status that opens the way to possible additional sanctions.

“Equities are slumping. They will slump more. Bond yields are tumbling. They will tumble far more,” said Rabobank in a report.

“Worry about global trade flows, as a stronger USD rumbles through the real economy and U.S.-China divorce smashes supply chains,” the bank said.

The Shanghai Composite Index fell to 2,749.85 and Tokyo’s Nikkei 225 retreated to 20,299.69. Hong Kong’s Hang Seng gave up 2.2% to 25,560.68 and Seoul’s Kospi shed 0.5% to 1,937.92.

Sydney’s S&P-ASX 200 retreated 2.6% to 6,468.30 and markets in Taiwan, New Zealand and Southeast Asia also declined.

On Wall Street, stocks suffered their biggest loss since December.

Investors already were unnerved about a cooling global economy and falling U.S. corporate profits.

The Standard & Poor’s 500 index dropped 3% to 2,844.74. The Dow Jones Industrial Average lost 2.9% to 25,717.74, and the Nasdaq composite fell 3.5% to 7,726.04.

The sell-off began Monday in Asia, where indexes lost more than 1%, and intensified as it swept westward through Europe to the Americas. Investors in search of safety herded into U.S. government bonds, which sent yields plunging.

The yield on the 10-year Treasury note fell to its lowest level since 2016, down to 1.72% from 1.85% late Friday. The yield on the two-year note sank to 1.58% from 1.71%. Both are unusually large moves.

Technology stocks bore the brunt of Monday’s selling. Apple slid 5.2%. It not only depends on Chinese factories to assemble its iPhones, but China is also the only country aside from the United States that accounts for more than 10% of its sales.

ENERGY: Benchmark U.S. crude rose 32 cents to $55.01 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 97 cents on Monday to close at $54.69. Brent crude, used to price international oils, gained 43 cents to $60.24 per barrel in London. It dropped $1.92 the previous session to $59.81.

CURRENCY: The dollar gained to 106.15 yen from Monday’s 106.15 yen. The euro strengthened to $1.1229 from $1.1204.

Joe McDonald, The Associated Press


Source link

Show More

Related Articles

9 Comments

  1. Just wish to say your article is as amazing. The
    clarity on your put up is just excellent and i can think you are an expert in this subject.
    Well together with your permission allow me to clutch your RSS feed to stay updated with forthcoming
    post. Thanks a million and please continue the gratifying work.

  2. Howdy, i read your blog from time to time and i own a similar one and i was
    just wondering if you get a lot of spam responses?
    If so how do you reduce it, any plugin or anything you can advise?
    I get so much lately it’s driving me mad so any assistance is very much
    appreciated.

  3. hi!,I like your writing so a lot! percentage we keep up a correspondence extra about your post on AOL?

    I need an expert in this area to solve my problem.
    May be that’s you! Having a look ahead to see you.

  4. I’ll right away seize your rss as I can not to find your
    email subscription hyperlink or e-newsletter service.
    Do you’ve any? Kindly permit me understand so that
    I may subscribe. Thanks.

  5. Hmm it appears like your website ate my first comment (it was extremely long) so I guess I’ll just sum it up what I had written and say, I’m thoroughly enjoying your blog. I too am an aspiring blog writer but I’m still new to the whole thing. Do you have any helpful hints for rookie blog writers? I’d certainly appreciate it.

Leave a Reply to oprol evorter Cancel reply

Your email address will not be published. Required fields are marked *

Close
Close
%d bloggers like this: