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6 July, 2018 00:00 00 AM
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Asian markets fall ahead of US-China tariff deadline

US is set to begin enforcing tariffs on more than $34 billion in Chinese imports from today
AFP

Asian stocks fell yesterday as investors fretted over US-China tariffs due to kick in within hours and which threaten to plunge the world's top two economies into an all-out trade war, reports AFP from Hong Kong.

The US is set to begin enforcing tariffs on more than $34 billion in Chinese imports from today (Friday).

Beijing has vowed to respond with its own tariffs immediately, arguing it has "no choice but to fight" and accusing Washington of "opening fire on the whole world" with the trade restrictions.

But Washington has threatened to introduce even steeper US counter-measures, potentially covering another $400 billion in Chinese goods, if Beijing retaliates.

With a public holiday in US meaning no lead from Wall Street for anxious traders to follow, and amid ongoing concerns about the slowing Chinese economy, all eyes were on the looming tariff deadline and fears of escalation.

Hong Kong shares fell 0.2 per cent, while Shanghai stocks closed at a two-year low after shedding 0.9 per cent.

The yuan lost ground against the dollar despite central bank chief Yi Gang's pledge earlier this week to keep the exchange rate stable and avoid using the currency as a weapon in any trade war.

Elsewhere, Tokyo slipped 0.8 per cent, while Seoul, Taipei and Bangkok also posted losses.

Washington describes its tariffs as retribution for Beijing's theft of American technology and other unfair trade practices.

Greg McKenna, chief market strategist at AxiTrader, said "there has been a subtle but distinct shift in the number of voices who are now saying this could all end up in a big global mess with a huge hit to global growth".

Traders may have underestimated the resolve of the US administration to pursue President Donald Trump's protectionist agenda, he said.

Energy and financial stocks were among the biggest losers in Asia. Shares in HKICIM -- the Hong Kong-listed subsidiary of Chinese conglomerate HNA Group whose co-founder died after falling off a wall in France Tuesday -- fell 3.7 per cent.

Europe's stock markets rose slightly as trade got under way, with London up 0.3 per cent.

Investors are also watching for key data from the US including payroll figures and Federal Reserve meeting minutes later this week.

Oil prices levelled out after Trump fired a warning shot at OPEC.

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help," Trump tweeted, adding: "REDUCE PRICING NOW!"

Oil prices have been on an upward trend as

Saudi Arabia struggles to offset supply disruptions around the world including in Libya, Venezuela and Canada.

The prospects of Iranian oil exports being curtailed due to US calls for countries to stop buying from them -- and Tehran's belligerent threats to choke Middle East crude supply routes -- have put upward pressure on the market.

"[Trump] can tweet as much as he wants but

until the oil flows successfully, or there is a real belief it will, prices will remain elevated," McKenna said.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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