Asian Markets Fall As U.S.-China Trade Tensions Rise

Asian Markets Fall As U.S.-China Trade Tensions Rise

May 10, 2019

Asian stock markets are in negative territory on Monday with some of the markets sharply lower, while the U.S. stock futures also fell, as the positive cues from Wall Street on Friday following upbeat U.S. jobs data for the month of April was more than offset by renewed worries about U.S.-China trade talks.

President Donald Trump said on Sunday that the U.S. will hike tariffs on $200 billion worth of Chinese goods this week, with further tariffs “shortly”. In addition, the Wall Street Journal reported that China is considering cancelling the trade talks due to Trump’s latest threats.

The Australian market is declining with stocks lower across the board, on worries about U.S.-China trade talks and following weak earnings results from banking giant Westpac.

The benchmark S&P/ASX 200 Index is losing 67.20 points or 1.06 percent to 6,268.60, after falling to a low of 6,248.40 earlier. The broader All Ordinaries Index is down 70.80 points or 1.10 percent to 6,356.40. Australian shares closed modestly lower on Friday.

In the mining space, Fortescue Metals is lower by more than 1 percent, BHP Group is losing 0.7 percent, and Rio Tinto is down 0.6 percent.

Oil stocks are weak despite crude oil prices edging higher Friday. Santos is declining almost 2 percent, Oil Search is lower by more than 1 percent and Woodside Petroleum is losing 0.7 percent.

The big four banks are also mostly lower. Commonwealth Bank, ANZ Banking and Westpac are lower in a range of 0.1 percent to 0.9 percent, while National Australia Bank is edging up 0.1 percent.

Westpac reported a 22 percent fall in cash profit for the first half of the year, but maintained its interim dividend.

Gold miners are mixed despite an increase in gold prices on Friday. Evolution Mining is rising more than 1 percent, while Newcrest Mining is edging down 0.1 percent.

Retail Food Group admitted it extended use-by-dates on food products, but said it will voluntarily withdraw them from sale by franchisees. The beleaguered company’s shares are losing more than 6 percent.

In the currency market, the Australian dollar is lower against the U.S dollar on Monday. The local currency was quoted at $0.6971, down from $0.6995 on Friday.

Elsewhere in Asia, Shanghai is losing almost 5 percent, while Singapore and Hong Kong are lower by more than 3 percent each. Taiwan is declining almost 2 percent, while New Zealand and Indonesia are down almost 1 percent each. Malaysia is also lower. The markets in Japan and South Korea are closed for holidays.

On Wall Street, stocks closed higher on Friday after the Labor Department released a closely watched report showing much stronger than expected job growth in the month of April. The Labor Department said non-farm payroll employment surged up by 263,000 jobs in April following a downwardly revised increase of 189,000 jobs in March. Economists had expected employment to climb by 185,000 jobs.

The Dow advanced 197.16 points or 0.8 percent to 26,504.95, the Nasdaq surged up 127.22 points or 1.6 percent to 8,164.00 and the S&P 500 jumped 28.12 points or 1 percent to 2,945.64.

The major European markets all moved to the upside on Friday. The French CAC 40 Index edged up by 0.2 percent, the U.K.’s FTSE 100 Index rose by 0.4 percent and the German DAX Index advanced by 0.6 percent.

Crude oil prices edged higher on Friday. WTI crude for June delivery inched up $0.13 to $61.94 a barrel on the New York Mercantile Exchange.

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