Tag: asian shares

Asian stocks on edge hours before tariff deadline

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian share markets were set for a bumpy ride on Friday just hours ahead of a US deadline to impose tariffs on Chinese imports, which has rattled financial markets in recent weeks as investors feared it could trigger a full-blown global trade war.

On Thursday, U.S. President Donald Trump confirmed that the United States would begin collecting tariffs on $34 billion worth of Chinese imports at 12:01 a.m. Washington time (0401 GMT) on Friday, and warned that subsequent rounds could see tariffs imposed on more than $500 billion worth of goods.

“The risk that further escalation derails growth is keeping some investors cautious,” ANZ analysts said in a note Friday.

The Sino-US trade dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal over the past several weeks.

Overnight gains in European and U.S. equities, however, provided some comfort for the start of Asian trading. MSCI’s broadest index of Asia-Pacific shares outside Japan  inched up 0.05 percent, with some support from early gains in Korean and Australian shares.

Japan’s Nikkei stock index was 1.1 percent higher after closing at a three-month low on Thursday, while Australian shares gained 0.2 percent. Seoul’s Kospi index edged up 0.2 percent.

In Thursday’s Wall Street session, the Dow Jones Industrial Average  rose 0.75 percent, the S&P 500 gained 0.86 percent and the Nasdaq Composite 1.12 percent.

US and European shares were boosted by reassuring economic data from Germany, and as automakers’ shares jumped, with German Chancellor Angela Merkel saying she would back lowering European Union tariffs on U.S. car imports after Washington offered to scrap threatened tariffs on European cars.

But newly released minutes from the US Federal Reserve’s last policy meeting on June 12-13 showed policymakers discussed whether recession lurked around the corner, and expressed concerns global trade tensions could hit an economy that by most measures looked strong.

The yield on benchmark 10-year Treasury notes was at 2.8364 percent. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.5527 percent compared with a U.S. close of 2.561 percent.

Gold, which is sensitive to rising interest rates, was flat. Spot gold traded at $1257.63 per ounce.

The dollar fell slightly against the yen, dropping 0.1 percent to 110.54.

The single currency was up a hair on the day at $1.1694, while the dollar index, which tracks the greenback against a basket of six major rivals, turned down 0.1 percent to 94.365.

Oil prices ticked up after falling on U.S. government data that showed an unexpected jump in crude oil stockpiles.

US crude  rose 0.2 percent at $73.08 a barrel. Brent crude was also 0.2 percent higher at $77.52 per barrel.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian shares, yuan on shaky ground on spectre of Sino-US trade war

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Asian stocks were on shaky ground on Wednesday while the Chinese yuan stood near 11-month lows as the spectre of a Sino-US trade war haunted investors ahead of an end-of-week deadline for U.S. tariffs on billions of dollars worth of Chinese imports.

MSCI’s broadest index of Asia-Pacific shares outside Japan  edged up 0.1 percent in early trade, a day after it hit a nine-month low. Japan’s Nikkei lost 0.5 percent.

Wall Street dropped on Tuesday, giving up early gains in a truncated session ahead of the Independence Day holiday on Wednesday, while technology shares came under pressure just a day after their solid start for the quarter on Monday.

The S&P 500 lost 0.49 percent while the Nasdaq Composite dropped 0.86 percent.

Facebook lost 2.3 percent after the Washington Post reported a federal probe on the data breach linked to Cambridge Analytica was broadened while Tesla fell 7.2 percent on questions over whether it could sustain the pace of making its Model 3 sedans.

Micron Technology Inc fell 5.5 percent after its rival firm, Taiwan-based competitor United Microelectronics Corp said it received a temporary injunction banning chip sales in mainland China.

Coming on the heels of escalating tensions between the United States and China over tariffs and investment restrictions, the injunction sparked selling in other U.S. chipmakers.

“We have the issue of Micron just when technology shares started to lose momentum after their stellar performance so far this year. If we see further profit-taking in the sector, that would be worrying given their heavy weighting in major indexes,” said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

The news hit chip-related shares in Japan. SMC Corp, manufacturer of machines used for chip-making, fell 6.5 percent while Advantest, maker of chip inspection machines, fell 5.6 percent.

Many investors fear Washington will go ahead with its plan to impose tariffs on $34 billion worth of Chinese goods on July 6, which Beijing has vowed to match with tariffs on U.S. products, raising the risk of a full-blown trade war.

In the currency market, the yuan remained under pressure.

The Chinese currency fetched 6.6715 per dollar in early Asian trade, off Tuesday’s 11-month low of 6.7344 after China’s central bank moved to calm jittery financial markets.

The People’s Bank of China Governor Yi Gang said in a statement on Tuesday that the central bank was closely watching fluctuations in the foreign exchange market and would seek to keep the yuan at a stable and reasonable level.

The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, has lost more than 3 percent in the past two weeks.

On the other hand, the Mexican peso surged 2.6 percent, its biggest one-day gain in more than two years, on soothing comments from the country’s newly elected leftist president that he will not ramp up spending.

Major currencies were treading water as traders fretted about the fallout of the intensifying trade frictions between Washington and the rest of the world.

The euro stood little changed at $1.1658, keeping gains after Germany’s coalition settled a row over migration that had threatened to topple Chancellor Angela Merkel’s government.

The dollar changed hands at 110.56 yen.

Oil prices were supported as larger-than-expected fall in US stockpiles data from the American Petroleum Institute confounded worries about supply shortage.

US light crude futures traded up 0.6 percent at $74.62 per barrel, after rising above $75 for the first time in more than three years on Tuesday.

International benchmark Brent futures stood flat at $77.77.

Copper, on the other hand, hit nine-month lows on Tuesday on worries trade frictions could slow down global growth. It last traded at $6,521, up 0.5 percent on the day but still near Tuesday’s low of $6,490.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks sag as U.S. tariffs reignite trade war fears

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Asian equities sagged on Friday as worries about US trade policy hit global financial markets, which were already shaken this week by political turmoil in Italy.

Wall Street shares posted deep losses overnight after the United States said it would impose tariffs on aluminium and steel imports from Canada, Mexico and the European Union.

Fears of a global trade conflict, which had partially receded over the past few weeks, were rekindled as Washington’s allies took steps to retaliate against the US measures.

MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.08%.

The index was down roughly 0.9% this week, during which it touched a six-week low on concerns that political developments in Italy could weaken its commitment to the euro and exacerbate the country’s debt burden.

Japan’s Nikkei shed 0.1 percent.

“The downward correction in equity markets is likely to continue, as the United States has opened up a new point of contention on the trade front by getting involved with the European Union,” said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.

“President (Donald) Trump has not accomplished very much in terms of trade issues and is likely to remain vocal with the U.S. midterm elections coming up.”

Investor focus on Friday is also on Chinese markets with the country’s mainland shares scheduled to join index publisher MSCI’s emerging market index. The inclusion was seen as potentially increasing investment from global investors into China’s capital markets.

In currencies, the Canadian dollar and the Mexican peso were on the defensive, weighed by the U.S. decision to impose tariffs on aluminium and steel imports from these countries.

The euro was little changed at $1.1687 holding to modest gains made on relief overnight as Italy’s anti-establishment parties reached a deal to resurrect their proposed coalition government.

The deal by the Italian parties averted the prospect of a new snap election, which had rattled global markets earlier this week and sent the euro to a 10-month low of $1.1510 on Tuesday.

The dollar was steady at 108.830 yen, having lost about 0.5 percent against this week as the earlier global market tumult had enhanced demand for the Japanese currency, which is a perceived safe-haven.

Brent crude rose 0.2 percent to $77.73 a barrel.

Prices swerved between $74.49, a three-week low, to $78.75 this week on speculation towards output by major oil-producing nations.

U.S. crude was down 0.1 percent at $66.97 a barrel.

Brent’s premium over U.S. crude reached its widest since March 2015 this week as a lack of pipeline capacity in the United States has trapped a lot of output inland.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow