Asian stocks fall as trade concerns weigh on investor sentiment
Asian stocks traded lower on Wednesday after as global trade concerns weighed on investor sentiment.
The Nikkei 225 slipped 0.75% in afternoon trade, while the Topix fell 0.93%.
South Korea’s Kospi also declined 1%. Over in Australia, the S&P/ASX 200 bucked the overall trend in the region as it traded 0.49% higher.
By the morning session’s end, The Shanghai composite was lower by 0.7% and the Shenzhen component shed 0.61%. The Shenzhen composite fell 0.635%. Hong Kong’s Hang Seng index slipped 0.18%.
Meanwhile, a private survey on Wednesday showed growth in China’s services sector slowing to a four-month low in June.
Concerns over U.S. trade policy continue to weigh on investor sentiment. Washington on Monday threatened to impose tariffs on $4 billion of additional European Union goods in a long-running dispute over aircraft subsidies.
The new wave of proposed duties comes amid a 15-year dispute at the World Trade Organization over aircraft subsidies given to U.S. aerospace manufacturer Boeing and its European rival, Airbus.
The U.S. Commerce Department also said Tuesday that tariffs would be imposed on steel from Vietnam that was originally produced in South Korea or Taiwan, saying that those had circumvented U.S. anti-dumping and anti-subsidy duties.
On the U.S-China front, however, U.S. President Donald Trump and Chinese President Xi Jinping agreed not to impose new tariffs on each other’s goods after the two met at the G-20 summit in Osaka, Japan.
In a speech given Tuesday, Bank of England Governor Mark Carney warned that existing trade tensions could “shipwreck the global economy or prove to be a tempest in a teacup. ”
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.730 after touching lows around 96.6 yesterday.
The Japanese yen traded at 107.59 against the dollar after strengthening from levels above 108.0 in the previous session, while the Australian dollar changed hands at $0.6996 after rising from the $0.696 handle yesterday.
Oil prices were higher in the afternoon of Asian trading hours, bouncing back from their Tuesday tumble. International benchmark Brent crude futures added 0.29% to $62.58 per barrel, while U.S. crude futures gained 0.34% to $56.44 per barrel.
The sharp decline in crude prices on Tuesday came despite the Organization of the Petroleum Exporting Countries and its allies including Russia agreeing to extend supply curbs until next March.
“The market clearly expected a six month rollover and when OPEC and Russia came out and said ‘we’re gonna do a nine month rollover,’ it indicated especially to me and the rest of the market that the oversupply situation is a little bit more serious than we thought and it’s gonna take a little bit longer in order to get world inventories under control,” Andy Lipow, president at Lipow Oil Associates, told CNBC’s “Squawk Box” on Wednesday.
Source: CNBC
