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Asian stocks broadly lower as US-China trade tensions rise again

Asian stocks remained in broadly negative territory on Monday afternoon, amid reports over the weekend that the U.S. could be imposing new tariffs on $200 billion of Chinese goods as early as this week.

In South Korea, the Kospi saw extended losses of 0.77 percent in the afternoon, with industry heavyweight Samsung Electronics falling further to trade 1.74 percent down.

Greater China markets also fell deeper into negative territory, with Hong Kong’s Hang Seng index dropping by 1.58 percent after its recovery late last week. Over on the mainland, the Shanghai composite traded down by 1.06 percent while the Shenzhen composite fell by 1.415 percent.

Down Under, the ASX 200 bucked the overall trend to trade up by 0.37 percent, as the financial sector traded up by 0.66 percent. National Australia Bank’s shares gained 0.77 percent in the afternoon, following the departure of a top executive at its consumer banking division.

Australian health care stocks plunge

Stocks in the health care sector Down Under dove on Monday morning, on the back of an announcement by the Australian government that a commission into the aged care sector had been established.

The overall health care sector on the ASX 200 saw a decline of 1.02 percent in the afternoon, with companies in the aged care space seeing steep falls. Regis Healthcare’s stock plunged by 15.88 percent while shares of Estia Health dropped by 18.14 percent, with Japara Healthcare following the overall trend by trading 15.37 lower.

On Sunday, the Australian Prime Minister’s office announced that a commission has been set up to examine the quality of aged care provided in “Residential and Home” settings.

Hong Kong feels the effects of Typhoon Mangkhut

Casino stocks in Hong Kong continued to fall in the afternoon, after casinos in Macau were forced to shut on Saturday with the arrival of Typhoon Mangkhut.

Galaxy Entertainment Group’s stock fell by 2.41 percent, while Melco International Development slid by 2.46 percent and SJM Holdings declined by 2.36 percent. Wynn Macau and Sands China also saw their stocks taking a hit, albeit to a lesser extent, with Wynn lower by 0.52 percent and Sands sliding by 0.57 percent.

The casinos returned to operations on Monday though challenges remained in restoring power to those affected by outages over the weekend.

US-China trade war remains in focus

In U.S. market action last Friday, the S&P 500 saw a slight gain to close at 2,904.98, while the Dow Jones Industrial Average rose by 8.68 points at 26,154.67 and the Nasdaq Composite slid 0.1 percent to 8,010.04.

The gains on Wall Street were largely kept in check following a report by Bloomberg that U.S. President Donald Trump still wanted to impose tariffs on $200 billion on Chinese goods despite attempts by Washington to reopen trade talks with Beijing.

On Sunday, a source told CNBC that that the new round of tariffs on Chinese goods was being readied ahead of the scheduled trade talks with Beijing, in line with an earlier report by the Wall Street Journal on Saturday that said the White House was set to impose the tariffs at 10 percent instead of the earlier number of 25 percent.

The Journal then followed up with another report on Sunday citing Chinese officials saying that Beijing could decline to participate in the proposed trade talks with the U.S. if Washington goes ahead with imposing the additional tariffs on Chinese imports.

A look at currencies

The U.S. dollar index, which tracks the greenback against a basket of currencies, was at 94.892 as of 11:55 a.m. HK/SIN, largely holding firm in the morning to its gains from last Friday.

“(The U.S. dollar) will take guidance this week from any trade discussion and bond and equity market movements,” said Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia.

The Japanese yen traded slightly stronger again against the dollar at 111.98 while the Australian dollar held on to its slight gain at $0.7156, as of 11:56 a.m. HK/SIN.

“This week, AUD/USD will take some guidance from the minutes of the (Reserve Bank of Australia’s) September policy meeting on Tuesday. We don’t expect much of a currency market reaction,” said Grace.

Source: CNBC

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