ZCZC
BCN-18,19
ASIA-MARKETS-UPDATE
Asian markets tumble as China-US trade tariffs loom
HONG KONG, July 2, 2018 (BSS/AFP) – Asian markets kicked the week off with
sharp losses Monday as investors prepare for the US to impose hefty tariffs
on a range of Chinese imports, taking their trade row to another level.
The levies on billions of dollars of goods, which are due Friday, come
after data at the weekend showed Chinese manufacturing activity slowed in
June as the world’s number two economy shows signs of struggling.
Fears of a trade war have rattled world markets and particularly China’s,
which are now in bear territory having fallen 20 percent from their recent
highs.
“China’s economy will slow down for the rest of the year, but we don’t
need to worry about any stall yet,” Zhu Qibing, chief macroeconomy analyst at
BOC International China in Beijing, said. “The key is how international trade
and the dispute between China and the US will evolve.”
On Monday, Shanghai dived 2.5 percent, while the Chinese yuan extended a
retreat that has led some observers to suggest the country’s central bank is
weakening the unit to offset the impact of a trade war.
While China is a key target in Donald Trump’s protectionist America First
agenda, he has also set his sights on allies including the European Union and
Canada, which on Friday imposed hefty tariffs on $12.6 billion of US goods in
retaliation for US measures on aluminium and steel.
Tokyo tumbled 2.2 percent as a closely watched gauge of Japanese business
showed sentiment was softening.
– Peso rises –
The Bank of Japan’s Tankan report — a quarterly survey of about 10,000
companies — showed a dip in confidence from the previous three months,
though economists pointed out that it is still around its highest level in
more than a decade.
In other markets Seoul dropped 2.4 percent, Sydney shed 0.3 percent and
Singapore retreated 0.9 percent, while Taipei gave up 0.5 percent and
Wellington was flat.
Hong Kong was closed for a public holiday.
In early European trade London fell 0.7 percent, Paris shed one percent
and Frankfurt lost 1.3 percent.
MORE/HR/1350
ZCZC
BCN-19
ASIA-MARKETS-UPDATE 2 LAST HONG KONG
On currency markets the euro dipped slightly but held most of Friday’s
gains following data showing inflation rising and news that European Union
leaders had reached a migration deal.
However there are worries about the future of German Chancellor Angela
Merkel’s coalition government after her conservative interior minister
offered to resign on Sunday over the issue.
Merkel had warned last week the issue of migration could decide the very
future of the EU itself.
The Mexican peso rose one percent against the dollar as anti-establishment
leftist Andres Manuel Lopez Obrador swept to the presidency, with his main
rivals conceding defeat and removing the risk of any dispute.
Oil prices retreated after Trump tweeted at the weekend that Saudi
Arabia’s King Salman had agreed to his request to open the taps wider.
The price drop comes after last week’s surge on the back of figures
indicating surging US demand and OPEC’s decision to hike output by a more
modest amount than initially thought.
Investors are also awaiting the release Friday of US jobs data, which will
provide another snapshot of the US economy and could provide the Federal
Reserve with more ammunition to hike interest rates.
– Key figures around 0720 GMT –
Tokyo – Nikkei 225: DOWN 2.2 percent at 21,811.93 (close)
Shanghai – Composite: DOWN 2.5 percent at 2,775.56 (close)
Hong Kong – Hang Seng: Closed for a holiday
London – FTSE 100: DOWN 0.7 percent at 7,582.26
Euro/dollar: DOWN at $1.1645 from $1.1689 at 2100 GMT Friday
Pound/dollar: DOWN at $1.3167 from $1.3213
Dollar/yen: UP at 110.75 yen from 110.61 yen
Oil – West Texas Intermediate: DOWN 68 cents at $73.47 per barrel
Oil – Brent Crude: DOWN 96 cents at $78.27 per barrel (new contract)
New York – Dow: UP 0.2 percent at 24,271.41 (close)
BSS/XINHUA/HR/1345