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Asian markets stumble again as trade fears persist
HONG KONG, Sept 12, 2018 (BSS/AFP) – The sell-off on Asian markets
extended into Wednesday with investors fearing an escalation in the US-China
trade row after Beijing said it planned to impose anti-dumping sanctions
worth billions on Washington.
The news adds to a sense of pessimism across trading floors in recent
weeks as the world’s top two economic powers stand on the cusp of an all-out
trade war that observers fear could batter the global economy.
It also comes as dealers struggle to deal with a brewing emerging-market
financial crisis and overshadows hopeful noises from Canada that a revised
NAFTA deal is “imminently possible”.
However, energy firms were broadly higher as oil prices benefited from a
sharp drop in US inventories, looming sanctions on Iran and Hurricane
Florence’s imminent impact on the Carolinas.
China said Tuesday it would ask the World Trade Organization next week for
permission to impose more than $7 billion in sanctions annually on the United
States over anti-dumping practices. The WTO will discuss the issue on
September 21.
The case dates back to December 2013, when China took issue with the way
Washington assesses whether exports have been “dumped” at unfairly low prices
onto the US market.
Beijing’s call comes after Donald Trump threatened to impose tariffs on
all goods coming from China, which he says is using unfair trade practices
that are harming American jobs. He has also railed against his country’s
massive trade deficit with China, which hit a record high last month.
On Wednesday China’s Vice Premier Hu Chunhua warned that protectionism
poses a “serious hazard” to growth and cautioned “individual countries”
against isolationism, in a veiled reference to the ongoing row.
Hong Kong was again among the worst performers, having fallen into a bear
market Tuesday — marking a 20 percent fall from its record high touched in
January.
– ‘Downside risk’ –
The Hang Seng Index ended down 0.3 percent — a sixth straight loss —
while Shanghai also dropped 0.3 percent to finish around levels last seen at
the very beginning of 2016.
MORE/HR/1428
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
Tokyo was 0.3 percent lower and Sydney fell 0.1 percent while Wellington
and Taipei were each 0.3 percent off.
Manila and Bangkok were also lower while Seoul and Singapore were flat.
“We are concerned that trade tensions are adding to the downside risks to
growth,” Sneha Sanghvi, head of Asian financial markets at Westpac, told
Bloomberg TV.
“We are seeing heightened volatility and risk aversion in financial
markets — that trend is likely to continue for the next few weeks.”
The losses came despite a positive lead from Wall Street, where energy
firms were boosted by a more than two percent rally in oil and technology
firms were supported by bargain-buying.
Both main crude contracts extended gains Wednesday, providing support to
energy firms, with eyes on the US east coast as Florence barrels in.
Japan’s Inpex more than two percent higher and Woodside Petroleum in
Sydney 1.6 percent higher. CNOOC put on more than one percent in Hong Kong.
“There is a strong possibility Hurricane Florence moves to a Category Five
storm before it hits land and it is already a major disruptor on the US east
coast gasoline market as mass evacuations stretch supplies and Florence’s
heavy rains endangers major fuel pipelines,” said Rodrigo Catril, senior
foreign exchange strategist at National Australia Bank.
In early European trade London was flat, while Paris and Frankfurt each
rose 0.2 percent.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: DOWN 0.3 percent at 22,604.61 (close)
Hong Kong – Hang Seng: DOWN 0.3 percent at 26,345.04 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,656.11 (close)
London – FTSE 100: UP 10 percent at 7,280.63
Euro/dollar: DOWN at $1.1599 from $1.1600 at 2040 GMT
Pound/dollar: UP at $1.3029 from $1.3026
Dollar/yen: DOWN at 111.50 yen from 111.57 yen
Oil – West Texas Intermediate: UP 55 cents at $69.80 per barrel
Oil – Brent Crude: UP eight cents at $79.14 per barrel
New York – Dow Jones: UP 0.4 percent at 25,971.06 (close)
BSS/AFP/HR/1430