Asian markets stumble again as trade fears persist

Hong Kong

The sell-off on Asian markets extended into Wednesday with investors fearing an escalation in the US-China trade row after Beijing said it planned to impose anti-dumping sanctions worth billions on Washington.
The news adds to a sense of pessimism across trading floors in recent weeks as the world’s top two economic powers stand on the cusp of an all-out trade war that observers fear could batter the global economy. It also comes as dealers struggle to deal with a brewing emerging-market financial crisis and overshadows hopeful noises from Canada that a revised NAFTA deal is “imminently possible”.
However, energy firms were broadly higher as oil prices benefited from a sharp drop in US inventories, looming sanctions on Iran and Hurricane Florence’s imminent impact on the Carolinas.
China said Tuesday it would ask the World Trade Organization next week for permission to impose more than $7 billion in sanctions annually on the United States over anti-dumping practices. The WTO will discuss the issue on September 21. The case dates back to December 2013, when China took issue with the way Washington assesses whether exports have been “dumped” at unfairly low prices onto the US market.
Beijing’s call comes after Donald Trump threatened to impose tariffs on all goods coming from China, which he says is using unfair trade practices that are harming American jobs. He has also railed against his country’s massive trade deficit with China, which hit a record high last month.
Hong Kong was again among the worst performers, having fallen into a bear market Tuesday—marking a 20 percent fall from its record high touched in January.
The Hang Seng Index was down 0.4 percent while Shanghai dropped 0.3 percent to finish around levels last seen at the very beginning of 2016.
Tokyo ended 0.3 percent lower and Sydney fell 0.1 percent while Wellington and Taipei were each 0.3 percent off.
Manila and Bangkok were also lower while Seoul and Singapore were flat.
“We are concerned that trade tensions are adding to the downside risks to growth,” Sneha Sanghvi, head of Asian financial markets at Westpac, told Bloomberg TV.
“We are seeing heightened volatility and risk aversion in financial markets—that trend is likely to continue for the next few weeks.” The losses came despite a positive lead from Wall Street, where energy firms were boosted by a more than two percent rally in oil and technology firms were supported by bargain-buying. Both main crude contracts extended gains Wednesday, providing support to energy firms, with eyes on the US east coast as Florence barrels in. Japan’s Inpex more than two percent higher and Woodside Petroleum in Sydney 1.6 percent higher. CNOOC put on more than one percent in Hong Kong.—AFP

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