HONG KONG, Dec 4, 2019 (BSS/AFP) – Asian investors extended a sell-off
in global markets on Wednesday after Donald Trump poured cold water on the
chances of a trade deal with China by the end of the year.
After weeks of broad optimism — and White House claims — that the
economic superpowers were close to a partial agreement, the president said he
could be happy to wait until after next year’s elections.
The comments, in London ahead of a tense NATO summit that has also fuelled
geopolitical concerns, sent shivers through trading floors across Europe and
New York, where dealers ran for the hills.
“I have no deadline,” Trump told reporters upon his arrival. “In some
ways, I like the idea of waiting until after the election for the China
deal.”
Investors were already on edge after the US reimposed stiff tariffs on
Argentina and Brazil citing currency manipulation, then threatened to hammer
France with 100 percent levies over the country’s digital tax.
US Commerce Secretary Wilbur Ross had also warned that more tariffs on
Chinese goods planned for December 15 would be imposed if the first phase of
trade talks was not completed by then.
Observers noted that Trump has in the past made statements on the issue
that he has soon rowed back on, but there is a growing concern that the next
round of China levies will be imposed.
A US House of Representatives vote to toughen the US position against
China regarding its treatment of minority Uighurs, calling for sanctions
against senior officials, will likely further complicate matters. Beijing
said the bill “wantonly smears” it.
The vote comes days after China announced retaliatory measures for Trump’s
decision to sign a bill supporting Hong Kong democracy protests.
– ‘Tairff man is back’ –
“While the trade mood music can change very quickly, events over the past
48 hours have forced a reassessment in terms of what to expect before the end
of the year,” said Rodrigo Catril at National Australia Bank.
“Tariff man is back and he has brought market volatility back to life.”
Markets were down across the board in Asia.
Hong Kong, Tokyo, Sydney and Seoul all lost more than one percent,
while Shanghai and Taipei each shed 0.4 percent, Singapore lost 0.5 percent
and Manila slipped 0.8 percent.
“It’s very difficult to have conviction about which way the trade
situation will go,” Laura Kane at UBS Global Wealth Management told Bloomberg
TV.
“Just a few weeks ago the news was incrementally positive, now we’ve moved
more negative again, but the situation is going to stay in flux as we enter
next year.”
The uncertainty sent investors running for safe-haven assets with the yen
holding Tuesday’s gains against the dollar, while gold pushed towards $1,500
and its highest levels since 2013.
Higher-yielding, riskier currencies were down against the greenback with
the Chinese yuan, South Korean won and Australian dollar among those
suffering a sell-off.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 1.3 percent at 23,087.80 (break)
Hong Kong – Hang Seng: DOWN 1.5 percent at 26,004.73
Shanghai – Composite: DOWN 0.4 percent at 2,872.21
Euro/dollar: DOWN at $1.1079 from $1.1080 at 2200 GMT
Pound/dollar: DOWN at $1.2995 from $1.2997
Euro/pound: DOWN at 85.24 pence from 85.25 pence
Dollar/yen: DOWN at 108.56 from 108.63 yen
West Texas Intermediate: UP 24 cents at $56.34 per barrel
Brent North Sea crude: UP 24 cents at $61.06 per barrel
New York – Dow: DOWN 1.0 percent at 27,502.81 (close)
London – FTSE 100: DOWN 1.8 percent at 7,158.76 (close)