Asian investors on Thursday largely brushed off China’s tit-for-tat response to Donald Trump’s latest tariff threats, with most markets rising, but concerns about the impact of an all-out trade war are keeping optimism in check.
Beijing said on Wednesday it would impose 25 percent tariffs on $16 billion of US goods from August 23, retaliating in kind to a warning from US officials the day before and escalating a crisis that pits the world’s top two economies against each other.
While the row has sent global markets into convulsions this year, the latest development had been widely expected, with Wall Street ending mixed. Hong Kong jumped 1.1 percent, extending a rally into a fourth day, while Shanghai surged 1.8 percent following healthy Chinese inflation data. Seoul was 0.1 percent higher, Sydney added 0.5 percent and Wellington rose 0.8 percent, while Bangkok gained 0.1 percent.
However, Tokyo dropped 0.2 percent on a stronger yen.
Manila was down 0.8 percent after data showed the Philippines economy massively undershot growth expectations in April-June, with the government citing the temporary closure of popular holiday island Boracay as a key reason. Energy firms fell in line with a sharp sell-off in oil, which followed a report showing US stockpiles fell less that expected, while investors are also fretting over the effects of a China-US trade war on demand. Both main contracts plunged more than three percent on Wednesday, with analysts saying figures pointing to a drop in Chinese imports from the US were also detrimental. WTI and Brent were slightly higher Thursday.
“Oil fell out of bed last night as worries over Chinese demand surfaced after the trade data yesterday and in the wake of China’s hitting back in the tariff war targeting energy products,” said Greg McKenna, chief markets strategist at AxiTrader. On currency markets the ruble extended Wednesday’s losses and is now down more than four percent against the dollar after Washington imposed fresh sanctions over Russia’s involvement in the attempted killing of a former spy in Britain.—Reuters