Asian Shares Extend Slide As Trade Fears Persist

Asian Shares Extend Slide As Trade Fears Persist

Asian stocks fell on Monday to extend last week’s slide as worries about global trade and higher U.S. interest rates lingered. A growing feud between the U.S. and Saudi Arabia over the disappearance of a prominent Saudi journalist also weighed on investors’ risk appetite.

Chinese shares tumbled to extend last week’s rout as traders remained on edge ahead of European Union summit, the Federal Open Market Committee’s (FOMC) September meeting minutes and a slew of domestic data, due this week.

The benchmark Shanghai Composite index plunged 38.81 points or 1.49 percent to 2,568.10 while Hong Kong’s Hang Seng index ended down 1.38 percent at 25,445.06.

China central bank governor Yi Gang said on Sunday he still sees plenty of room for adjustment in interest rates and the reserve requirement ratio (RRR), as downside risks from trade tensions remain significant.

Japanese shares hit eight-week lows, with automakers coming under heavy selling pressure after reports that the U.S. is seeking currency chapters in trade talks with Japan that would contain a provision about currency manipulation.

Investors also digested news that Prime Minister Shinzo Abe will go ahead with an increase in the consumption tax to 10 percent from the current 8 percent in October 2019.

The Nikkei average fell 423.36 points or 1.87 percent to 2,271.30, the lowest level since Aug. 21. The broader Topix index closed 1.59 percent lower at 1,675.44, marking the lowest level in nearly seven months.

Honda Motor slumped 2.6 percent and Toyota Motor lost 2.4 percent as the yen built on recent gains. Canon, Panasonic and Sony ended down between 0.6 percent and 1.7 percent.

Heavyweight SoftBank plunged 7.3 percent amid increased political tensions between the U.S. and Saudi Arabia, which is the biggest outside investor in SoftBank’s $100 billion Vision Fund.

Ono Pharmaceutical lost 2 percent after its potential blockbuster cancer drug Opdivo failed trial study.

Australian markets fell sharply as shares were sold off across the board on worries about the impact of the U.S.-China trade war on global economic growth.

The benchmark S&P/ASX 200 index dropped 58.60 points or 0.99 percent to 5,837.10 while the broader All Ordinaries index ended down 0.98 percent at 5,948.

Big miners BHP Billiton, Fortescue Metals Group, Rio Tinto and South32 fell between 0.7 percent and 1.6 percent despite a rise in base metal and iron ore prices over the weekend.

Gold miner Evolution Mining shed 1.3 percent and Northern Star shed 0.6 percent after gold prices fell half a percent on Friday.

Commonwealth Bank of Australia lost over 2 percent after the lender named Alan Docherty as chief financial officer. The other three banks also fell around 2 percent on concerns over rising compensation costs.

Oil & gas firm Santos rallied 2.9 percent as oil prices climbed amid growing tensions between the U.S. and Saudi Arabia over the disappearance of a prominent Saudi journalist.

Retail conglomerate Wesfarmers declined 0.3 percent after releasing an update on its first-quarter sales.

Seoul stocks fell notably as worries continued about global trade tensions and prospects for economic growth. The benchmark Kospi dropped 16.73 points or 0.77 percent to close at 2,145.12.

Chipmaker SK Hynix tumbled 2.9 percent, automaker Hyundai Motor gave up 1.7 percent and its affiliate Kia Motors plunged as much as 6.5 percent. LG Chem, which is building a large-scale lithium-ion battery plant in Poland, jumped 2.9 percent.

New Zealand shares finished marginally lower, with Steel & Tube Holdings and Fletcher Building pacing the decliners. Steel distributor Steel & Tube Holdings dropped 1.3 percent as Fletcher Building aborted its pursuit of the company. Fletcher, the country’s biggest building firm, shed 0.8 percent.

U.S. stocks rebounded on Friday after a two-day heavy sell-off as strong Chinese trade data helped ease concerns over slowing global growth and top White House economic adviser Larry Kudlow said a meeting between President Donald Trump and Chinese President Xi Jinping at a multilateral summit in November is “under discussion.”

The Dow rallied 1.2 percent and the S&P 500 surged 1.4 percent while the tech-heavy Nasdaq Composite jumped as much as 2.3 percent.

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