GLOBAL MARKETS-Asian shares slip on trade war anxiety, yuan steadies

By Reuters / July 05, 2018 / in.investing.com / Article Link

* Asian shares near 9-month low, Nikkei down 0.7 pct

* Falls in U.S. tech shares heighten worries

* Yuan bounces back after PBOC's moves

By Hideyuki Sano

TOKYO, July 4 (Reuters) - Asian stocks slipped on Wednesday on the spectre of a Sino-U.S. trade war ahead of an end-of-week deadline for U.S. tariffs on $34 billion worth of Chinese imports while the yuan stabilised after China's central bank moved to calm nervous investors.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged down 0.2 percent, a day after it hit a nine-month low. Japan's Nikkei .N225 lost 0.7 percent.

Mainland Chinese shares dropped, with CSI300 Index .CSI300 off 0.85 percent.

Wall Street shares declined on Tuesday, giving up early gains in a truncated session ahead of the Independence Day holiday on Wednesday, as technology shares came under pressure just a day after their solid start for the quarter on Monday.

The S&P 500 .SPX gave up 0.49 percent while the Nasdaq Composite .IXIC dropped 0.86 percent.

Facebook FB.O lost 2.3 percent after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened while Tesla TSLA.O fell 7.2 percent on questions over whether it could sustain the pace of making its Model 3 sedans.

Micron Technology Inc MU.O fell 5.5 percent after its rival firm, Taiwan-based competitor United Microelectronics Corp 2303.TW, said it received a temporary injunction banning chip sales in mainland China.

Coming on the heels of escalating tensions between the United States and China over tariffs and investment restrictions, the injunction sparked selling in other U.S. chipmakers. have the issue of Micron just when technology shares started to lose momentum after their stellar performance so far this year. If we see further profit-taking in the sector, that would be worrying given their heavy weighting in major indexes," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

The news hit chip-related shares in Japan. SMC Corp 6273.T , manufacturer of machines used for chip-making, fell 6.5 percent while Advantest 6857.T , maker of chip inspection machines, fell 5.6 percent.

Many investors fear Washington will go ahead with its plan to levy a 25 percent tariff on 818 product categories from China including cars on Friday, which Beijing has vowed to match with tariffs on U.S. products.

They worry the move could spark a full-scale international trade war and harm the global economy, especially as the Trump administration has threatened tariffs on imports from many other major economies,

The U.S. has listed another 284 product lines, valued at $16 billion, targeting semiconductors and a broad range of electronics, which it has said will go into effect after a public comment period and threatened another 10 percent tariffs on up to $400 billion of Chinese goods. has also threatened Europe with a 20 percent tariff on car imports while various countries have also already taken retaliatory steps against U.S. tariffs on steels and aluminuium products.

"Investors fret that global trade could shrink as countries impose tariffs one after another. They need to be defensive for the time being," said Yukino Yamada, senior strategist at Daiwa Securities.

In the currency market, the yuan bounced back a day after it had hit a 11-month low as China's central bank moved to calm jittery financial markets on Tuesday. People's Bank of China Governor Yi Gang said in a statement that the central bank was closely watching fluctuations in the foreign exchange market and would seek to keep the yuan at a stable and reasonable level. Chinese currency fetched 6.6318 per dollar CNY=CFXS in onshore trade, off Tuesday's low of 6.7204.

On the other hand, the Mexican peso MXN=D2 surged 2.6 percent, its biggest one-day gain in more than two years, on Tuesday on soothing comments from the country's newly elected leftist president that he will not ramp up spending.

Major currencies were treading water as traders fretted about the fallout of the intensifying trade frictions between Washington and the rest of the world.

The euro stood little changed at $1.1665 EUR= , keeping gains after Germany's coalition settled a row over migration that had threatened to topple Chancellor Angela Merkel's government.

The dollar changed hands at 110.40 yen JPY= , down 0.15 percent.

Oil prices were supported as larger-than-expected fall in U.S. stockpiles data from the American Petroleum Institute confounded worries about supply shortage.

U.S. light crude futures CLc1 traded up 0.6 percent at $74.58 per barrel, after rising above $75 for the first time in more than three years on Tuesday.

International benchmark Brent futures LCOc1 rose 0.4 percent to $78.07 a barrel.

Copper, on the other hand, hit nine-month lows on Tuesday on worries trade frictions could slow down global growth. It last traded at $6,521, up 0.5 percent on the day but still near Tuesday's low of $6,490 CMCU3 .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI, Nikkei datastream chart

http://reut.rs/2sSBRiD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Shri Navaratnam)

Recent News

Bullish bankers and bearish institutions split on gold forecasts

July 01, 2024 / www.canadianminingreport.com

Gold stocks down on flat metal price and mixed equities

July 01, 2024 / www.canadianminingreport.com

Snowline Gold reports Initial Resource Estimate

June 24, 2024 / www.canadianminingreport.com

Inflation subsiding and rate cuts starting internationally

June 24, 2024 / www.canadianminingreport.com

Inflation rebound continues to reverse

June 17, 2024 / www.canadianminingreport.com
See all >
Share to Youtube Share to Facebook Facebook Share to Linkedin Share to Twitter Twitter Share to Tiktok