Asia report: Markets finish lower ahead of US tariffs
Markets in Asia were well into the red on Monday, with trade tensions instigated by Washington and directed primarily at Beijing once again in focus.
In Japan, the Nikkei 225 slid 2.21~% to 21,811.92, as the yen weakened 0.09% against the dollar to last trade at JPY 110.86.
Most sectors recorded decent losses in Tokyo, with food plays and retailers among the biggest losers - the latter falling 3.58% on the Topix.
Uniqlo owner Fast Retailing was off 2.87% by end-of-play.
On the mainland, the Shanghai Composite was down 2.51% at 2,775.77, and the smaller, technology-heavy Shenzhen Composite slipped 1.58% to 1,582.26.
In fresh data out of China, the unofficial Caixin/Markit PMI came in line with expectations, following a miss for the country’s official purchasing managers’ index over the weekend.
The official figure from Beijing fell to 51.5, just short of a Reuters-polled forecast for 51.6.
South Korea’s Kospi fell 2.35% to 2,271.54, while markets in Hong Kong remained closed for a holiday.
Manufacturing names and the blue-chip technology stocks were among the worst performers in Seoul, with Samsung Electronics down 2.36% at the close.
Steel producer Posco bucked the index trend, however, managing a surge of 4.26%.
Caution was a continuing theme in the region as the new quarter began, as investors prepared for US tariffs on $34bn of Chinese goods to come into effect on Friday.
China was expected to hit back with retaliatory tariffs on US imports.
Last week was beset by concern Washington’s punitive stance on trade with its partners would extend to foreign investment in American technology.
There was also ongoing concern that, given the Trump administration was showing no signs of stopping its campaign of tariffs or its anti-trade rhetoric, the tension could still escalate to an all-out trade war which could have a significant impact on global growth.
“There is still no sign of the US and China restarting trade negotiations ahead of the July 6 start date for tariffs,” noted AMP Capital chief economist Shane Oliver over the weekend.
“Our base case remains that some form of negotiated solution will be reached, but things are likely to get worse before they get better.”
Oil prices were lower, with Brent crude last down 1.11% at $78.36 per barrel, and West Texas Intermediate falling 0.67% to $73.66.
In Australia, the S&P/ASX 200 was down 0.27% at 6,177.80, led lower by gold producers and the consumer subindex.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.01% at 8,924.47, led lower by the Fonterra Shareholders Fund - an instrument used to allow farmer members of the behemoth dairy cooperative to trade their shares - which was off 2.6%.
Both of the down under dollars were weaker on the greenback, with the Aussie last behind 0.79% at AUD 1.3610, and the Kiwi retreating 0.88% to NZD 1.4890.