BEIJING (AP) — Asian stock markets followed Wall Street lower yesterday amid anxiety the United States (US)-Chinese trade war will hurt already slowing global economic growth.
Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney all retreated.
Investor anxiety has been fed by US President Donald Trump’s threat of new US tariff hikes on Chinese goods, protests in Hong Kong and weaker-than-expected data from India, Argentina and Singapore.
“The global economy is perched precariously, hoping for a positive inflection, but braced for a stumble,” said Vishnu Varathan of Mizuho Bank in a report.
The Shanghai Composite Index lost 0.5 per cent to 2,801.33, and Tokyo’s Nikkei 225 tumbled 1.2 per cent to 20,433.65. Hong Kong’s Hang Seng fell 1.2 per cent to 25,524.86.
Seoul’s Kospi lost 0.7 per cent to 1,928.80, while Sydney’s S&P-ASX 200 was 0.3 per cent lower at 6,579.70. Markets in New Zealand and Southeast Asia also retreated.
Investors were rattled by a Chinese government statement on Monday saying mostly nonviolent protests in Hong Kong were “beginning to show the sprouts of terrorism” and were an “existential threat” to the population.
Hong Kong’s airport, one of the world’s busiest, cancelled all flights Monday evening after thousands of pro-democracy protesters crowded into its main terminal.
Beijing’s use of the term terrorism “triggered a wave of risk aversion across global markets,” said Stephen Innes of VM Markets in a report.
On Wall Street, the benchmark Standard & Poor’s 500 had its biggest decline in a week while the Dow Jones Industrial Average lost nearly 400 points.
Selling was widespread. Technology companies and banks accounted for a big share of the decline.
Investors sought safety in US government bonds, sending their yields tumbling. The price for gold, another traditional safe-haven asset, closed higher.
The S&P 500 lost 1.2 per cent to 2,883.09. The Dow fell 1.5 per cent, or 389.73 points, to 25,897.71.
The Nasdaq composite dropped 1.2 per cent to 7,863.41.
Trump has promised 10 per cent tariffs on some USD300 billion in Chinese imports that haven’t already been hit with tariffs of 25 per cent. The new tariff would go into effect on September 1 and more directly affect US consumers.
Last week, Trump said he’d be “fine” if the US and China don’t go ahead with a meeting next month, dampening investors’ hopes for a resolution.