Asia report: Markets close red as US tariffs loom over China

Markets in Asia followed their Wall Street counterparts into the red on Wednesday, as concerns around global trade continued to marinate ahead of the 6 July deadline set by Washington for fresh tariffs on Chinese imports.

In Japan, the Nikkei 225 was down 0.31% at 21,717.04, as the yen strengthened 0.08% against the dollar to last trade at JPY 110.50.

Electrical appliances led the decliners on the Topix, tripping 1.9%, with semiconductors joining it on the downside, while mining plays and utilities were among the gainers.

On the mainland, the Shanghai Composite slid 0.94% to 2,760.59, and the smaller, technology-heavy Shenzhen Composite slipped 1.96% to 1,563.00.

South Korea’s Kospi dipped 0.32% at 2,265.46, while the Hang Seng Index was off 1.06% at 28,241.67.

Yet again, trade jitters topped investor agendas across the region, with US tariffs on $34bn of Chinese products set to kick in on Friday.

Beijing has promised retaliatory tariffs of its own on US imports should this round of punitive charges go ahead, although further detail has not yet been forthcoming.

Concerns have not been solely focussed on China, however, with Canada, the European Union and Mexico all beginning to impose their own retaliatory tariffs on the US after the Trump administration decided to whack tariffs on steel and aluminium imports from such close trading partners.

“Further news from the Chinese side and in the US suggest that the trade issue remains unresolved, with the atmospherics remaining testy,” noted National Australia Bank director of economics David de Garis.

In news more local, investors in Malaysia watched the arrest of ex-prime minister Najib Razak over investigations into the 1Malaysia Development Berhad scandal.

According to local news reports, Najib was handed three charges of criminal breach of trust.

Oil prices were mixed, with Brent crude last up 0.12% at $77.85 per barrel, while West Texas Intermediate lost 0.35% to $73.88.

In Australia, the S&P/ASX 200 ended its session 0.43% below the waterline at 6,183.40, with almost all subindices finishing on the wrong side of zero.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.3% at 9,025.64, led lower by speciality dairy products exporter A2 Milk, which lost 3.4%.

The down under dollars were mixed against the greenback, with the Aussie last 0.02% weaker at AUD 1.3543, while the Kiwi strengthened 0.1% to NZD 1.4789.