Asian markets mostly down, trade war fears back in headlines

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HONG KONG, Oct 30, 2018 (BSS/AFP) – Asian markets mostly fell Tuesday with
Hong Kong and Shanghai stocks sinking following a report that the White House
is preparing to impose tariffs on all its Chinese imports, throwing the trade
war back into the spotlight.

The story added to skittishness across trading floors, where investors are
already fretting over a number of issues including geopolitical tensions,
rising US interest rates, slowing growth, Brexit and Italy’s budget standoff
with the EU.

Wall Street provided another negative lead, with the S&P 500 and Dow now
suffering similar selling pressure to other global markets, having held up
for most of the year and even chalking up several record highs as early as
this month. The New York losses also came despite more positive economic
data.

In early Asian trade Hong Kong shed 0.9 percent and Shanghai was 0.7
percent off after Bloomberg News reported Donald Trump is planning more
tariffs on China if talks with Chinese President Xi Jinping next month are
unsuccessful.

It cited unnamed sources as saying a list is being drawn up for a December
announcement to hit another $267 billion of goods with levies.

With $250 billion already being targeted, the move would mean all China’s
shipments to the United States are taxed. Beijing has said in the past that
it will retaliate against any measures, putting the world’s top two economies
on course for an all-out trade war.

– Euro woes –

The row comes as Chinese growth stutters, putting pressure on the
government to provide support measures such as lowering the amount of cash
banks must keep in reserve and tax cuts, just as it struggles to deal with a
huge debt mountain.

In other markets Singapore fell 0.5 percent and Seoul shed 0.1 percent
while Taipei, Jakarta and Manila were also in the red.

However, Tokyo jumped 0.8 percent by the break thanks to a dip in the yen
against the dollar, which lifted exporters, while Sydney edged up 0.1
percent.

The dollar was also up against most other currencies, with the euro unable
to bounce back after German Chancellor Angela Merkel said she will not seek
re-election in 2021.

The announcement came after her fragile coalition government suffered heavy
losses in a key regional election and a junior partner threatened to quit,
which would likely spark a fresh general election.

Adding to euro weakness is Italy’s row with Brussels over its wallet-
busting budget, which EU officials says breaks the bloc’s finance rules,
while officials seem no closer to agreeing a deal with Britain over its exit
with a deadline approaching.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.8 percent at 21,316.33 (break)

Hong Kong – Hang Seng: DOWN 0.9 percent at 24,590.20

Shanghai – Composite: DOWN 0.7 percent at 2,524.97

Euro/dollar: DOWN at $1.1378 from $1.1384 at 2050 GMT

Pound/dollar: DOWN at $1.2801 from $1.2803

Dollar/yen: UP at 112.63 from 112.32 yen

Oil – West Texas Intermediate: DOWN 13 cents at $66.91 per barrel

Oil – Brent Crude: DOWN 40 cents at $76.94 per barrel

New York – Dow: DOWN 1.0 percent at 24,442.92 (close)

London – FTSE 100: UP 1.3 percent at 7,026.32 (close)