BCN-29, 30Asian markets mostly down on China tariff fears

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BCN-29

ASIA-MARKETS-UPDATE

Asian markets mostly down on China tariff fears

HONG KONG, Sept 7, 2018 (BSS/AFP) – Most Asian equities sank on Friday as
investors fret that the US will ramp up its trade war with China by imposing
fresh tariffs, while chip-makers were among the biggest losers following a
sharp sell-off in New York.

While emerging market contagion fears continue to stalk trading floors,
Donald Trump’s protectionist drive returned to the fore following an
indication Japan was next in the firing line, while NAFTA talks with Canada
amble along.

There was some relief that Trump did not immediately impose levies on $200
billion of Chinese goods after the passing of a deadline for a public
consultation.

The threatened tariffs would add to the $50 billion in imports already
targeted and mark a major step up in the long-running battle between the
world’s top two economies.

Beijing has warned it will immediately retaliate against any measures,
fuelling fears of an all-out trade war that is already showing signs of
causing a drag on the global economy.

The president also appeared to be preparing to set his sights on Japan,
with an opinion piece in the Wall Street Journal saying his good relationship
with Tokyo “will end as soon as I tell them how much they have to pay”.

While Trump has mostly taken out his anger with China and Europe, he has
often in the past complained of an uneven trade relationship with Japan.

Japan’s Nikkei led losses, ending 0.8 percent lower with exporters hurt by
a stronger yen as dealers ran to the safe-haven unit for shelter from market
turmoil.

“The timing of the WSJ story is significant as it serves as a reminder
before an expected Japan-US summit later this month, when trade consultations
will also likely be held,” said Daisuke Karakama, chief market economist at
Mizuho Bank.

Sydney lost 0.3 percent and Singapore dropped 0.4 percent. Seoul gave up
0.3 percent and Manila was 1.1 percent off, while Taipei shed 0.7 percent.
Hong Kong was flat after fluctuating through the day, while Shanghai
gained 0.4 percent by the close and Jakarta added 0.7 percent.
MORE/HR/1432

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BCN-30

ASIA-MARKETS-UPDATE 2 LAST HONG KONG

– Chip firms fried –

Chip firms joined their Wall Street counterparts in turning south on
growing concerns about demand after US semiconductor giant KLA-Tencor
softened its outlook for the sector.

Samsung sank almost three percent in Seoul while SK Hynix was 3.7 percent
lower. Tokyo Electron dived six percent and Advantest was more than seven
percent lower.

The “earnings trend in (the) semiconductor sector is bound to weaken
further as end-demand remains lacklustre while orders have been at very
elevated levels,” Amir Anvarzadeh, senior strategist with Asymmetric Advisors
in Singapore, told Bloomberg News.

He called talk of a short, sharp fall over-optimistic.

In foreign exchanges, emerging markets currencies enjoyed some respite
after recent losses, with the Indonesian rupiah and South African rand
inching higher. The Indian rupee also edged up but was still wallowing around
record lows.

Observers have warned of further turmoil as traders fear the crises in
Argentina, Turkey and South Africa could spill over into other economies.

The upheaval has revived worries of a repeat from 1997, when a collapse in
the Thai baht mushroomed into a much broader Asian economic crisis.

However, Credit Suisse investment strategist Suresh Tantia said the sell-
off could provide long-term benefits for dealers.

“Emerging-market equities are handcuffed by trade uncertainty and concerns
around contagion risk at this point of time,” he said.

“We believe they offer tremendous value as the growth outlook for EM
remains healthy and valuations have become very attractive.”

In early trade, London was flat, while Paris edged up 0.3 percent and
Frankfurt gained 0.2 percent.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: DOWN 0.8 percent at 22,307.06 (close)

Hong Kong – Hang Seng: FLAT at 26,974.82 (close)

Shanghai – Composite: UP 0.4 percent at 2,702.30 (close)

London – FTSE 100: FLAT percent at 7,319.54

Euro/dollar: UP at $1.1646 from $1.1624 at 2100 GMT

Pound/dollar: UP at $1.2942 from $1.2929

Dollar/yen: DOWN at 110.69 yen from 110.71 yen

Oil – West Texas Intermediate: UP 16 cents $67.93 per barrel

Oil – Brent Crude: UP 12 cents at $76.62 per barrel

New York – Dow: UP 0.1 percent at 25,995.87 (close)

BSS/AFP/HR/1435