Asia report: Most markets finish lower amid Trump threats on China trade

Markets in Asia finished mostly lower on Wednesday, as investors digested fresh developments in the ongoing trade war between the US and China overnight.

In Japan, the Nikkei 225 was down 0.31% at 21,469.18, as the yen remained flat against the dollar, last trading at JPY 108.24.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.55%, fashion firm Fast Retailing off 0.63%, and technology conglomerate SoftBank Group 2.35% lower.

The broader Topix index was down 0.09% in Tokyo trading, closing out the session at 1,567.41.

On the mainland, the Shanghai Composite was 0.2% weaker at 2,931.69, and the smaller, technology-heavy Shenzhen Composite was up 0.16% to 1,574.35.

South Korea’s Kospi was 0.91% lower at 2,072.92, while the Hang Seng Index in Hong Kong slipped 0.09% to 28,593.17.

Both of the blue-chip technology stocks were in the red in Seoul, with Samsung Electronics down 1.71%, and chipmaker SK Hynix off 1.97%.

In fresh local developments, exports from Singapore fell significantly more than expected in June, as non-oil domestic exports plummeted 17.3% year-on-year for the month.

That was far beyond the 9.9% fall anticipated by economists polled by Reuters, and was the largest decline for the city-state since February 2013.

It came after the country’s gross domestic product also came in below forecasts for the second quarter, with analysts expecting its central bank to now ease monetary policy as the US-China trade war continues to have a slowing effect on the Singapore economy.

On that trade war front, Donald Trump said overnight that the world’s two largest economies still had a significant amount of work to do, suggesting that Washington could still slap punitive tariffs on another $325bn of Chinese goods “if we want”.

The comments from the US president came after the two governments agreed a ceasefire in a bid to get trade negotiations back on track.

“US President Donald Trump spoiled the expectations of a US-China trade deal yet again, after he said he could impose more tariffs on Chinese goods, claiming that Beijing pledged, but didn’t increase purchases of US farm products following the G20 summit,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“But that’s not all - the Fed is also talking about launching a new monetary policy tool: standing repurchase agreement facility (SRF), which should allow the eligible banks to convert their treasury holdings into reserves on demand.

“FOMC members will likely dig into the possibility of introducing this new tool to increase the incentive for banks to hold a greater amount of treasuries in their books and to have a better control on the short-term rates.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.91% at $64.94 per barrel, while West Texas Intermediate rose 0.6% to $57.97.

In Australia, the S&P/ASX 200 managed gains of 0.49% to 6,673.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 eked out gains of 0.03% to 10,654.80.

The down under dollars were mixed on the greenback, with the Aussie last 0.03% weaker at AUD 1.4267, while the Kiwi advanced 0.29% to NZD 1.4879.