ZCZC
BCN-01
ASIA-MARKETS
Asian markets sink as Trump further stokes trade war fears
HONG KONG, May 16, 2019 (BSS/AFP) – 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 rising 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 licence,” 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.
MORE/HR/0915
ZCZC
BCN-02
ASIA-MARKETS 2 LAST HONG KONG
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)
BSS/AFP/HR/0918