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Aug. 25, 2019, 11:21 p.m. EDT

Asian markets sink as Trump ratchets up trade tensions

Deep losses in Tokyo, Hong Kong after Trump says he’ll hike tariffs on Chinese goods

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By Marketwatch and Associated Press


Reuters
Containers are seen at the Yangshan Deep Water Port in Shanghai, China.

Asian markets plunged in early trading Monday, as the trade war between the U.S. and China heated up.

On Friday, President Donald Trump raised tensions by announcing he would raise tariffs on $250 billion of Chinese goods to 30% from 25% starting Oct. 1, and hike tariffs on another $300 billion in Chinese imports to 15% from 10%, in two stages, on Sept. 1 and Dec. 15.

Trump said Sunday at the G-7 summit in France that he had some regrets about hiking the tariffs, which the White House later clarified as meaning he regrets he didn’t raise them higher.

Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +0.18%   sank 2.1% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.48%   slumped 2.7%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -1.32%   fell 1.2% and the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -1.17%   retreated 1%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.83%   slipped 1.4%, while benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 -0.06%  , Singapore /zigman2/quotes/210597985/delayed SG:STI -0.38%   and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.18%   fell as well. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.52%   dipped 1.3%.

Among individual stocks, SoftBank /zigman2/quotes/207303954/delayed JP:9984 +0.09%   and robotics maker Fanuc /zigman2/quotes/202054799/delayed JP:6954 +2.21%   dropped in Tokyo trading, along with Nikon /zigman2/quotes/203281219/delayed JP:7731 -1.53%   and Fast Retailing /zigman2/quotes/200663563/delayed JP:9983 +1.82%  . In Hong Kong, food processor WH Group /zigman2/quotes/204247792/delayed HK:288 -0.13%   tumbled, with New World Development /zigman2/quotes/202357413/delayed HK:17 -1.25%  , Apple component maker AAC /zigman2/quotes/201441510/delayed HK:2018 -0.65%   and oil producer CNOOC /zigman2/quotes/203421416/delayed HK:883 -0.50%   posting heavy losses as well. Samsung /zigman2/quotes/209800866/delayed KR:005930 -1.19%   and SK Hynix /zigman2/quotes/206420319/delayed KR:000660 -4.44%   fell in South Korea, while Foxconn /zigman2/quotes/204111604/delayed TW:2354 -0.15%  sank in Taiwan. In Australia, Beach Energy /zigman2/quotes/200513631/delayed AU:BPT 0.00%  , Westpac /zigman2/quotes/203084975/delayed AU:WBC -0.83%   and BHP /zigman2/quotes/201448516/delayed AU:BHP -0.20%   fell.

Stephen Innes, managing partner at Valour Markets in Singapore, compared the difficulty of assessing the volatile market situation to reading tea leaves.

“Nobody understands where the president is coming from,” he said, adding that the best thing Trump can do for market stability is to “keep quiet.”

“The problem that we’re faced right now is that we are making a lot of assumptions ahead of the economic realities.”

The market is now dominated by fears of a portending U.S. recession, although the American economy is actually holding up, and much of the U.S. economy is made up of consumption, Innes said. If interest rates come down, he added, consumer spending is likely to go up, working as a buffer for the economy.

“What the market’s really waiting for is for them to drop interest rates,” Innes said. “Right now, we are still sitting on that uncertainty.”

The Dow Jones Industrial Average plunged more than 600 points Friday after the latest escalation in the trade war between the U.S. and China rattled investors. The broad sell-off sent the S&P 500 to its fourth straight weekly loss.

The tumbling began after Trump responded angrily on Twitter following China’s announcement of new tariffs on $75 billion in U.S. goods. In one of his tweets he “hereby ordered” U.S. companies with operations in China to consider moving them to other countries — including the U.S.

Trump also said he’d respond directly to the tariffs — and after the market closed he delivered, announcing that the hikes on tariffs.

The ongoing trade dispute between Washington and Beijing, and especially its unpredictability, is certain to have damaging effects on Asia. The unpredictability affects the real decisions central banks make on fiscal policy and companies make on their strategies and investments, setting off ripples of uncertainty.

Zhu Huani of Mizuho Bank in Singapore said what he called Trump’s “tariff tantrum” was setting off “the sense that tariffs could continue to rise,” with the “the unpredictability of timing and extent of these trade actions risk accentuating the paralysis of business decisions and big-ticket business spending.”

“No matter which way you cut the cake, it is nearly impossible to construct a bullish, or even neutral scenario for equity markets today,” said Jeffrey Halley, senior market analyst at Oanda.

The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.39%   fell 75.84 points, or 2.6%, to 2,847.11. The index is now down 4.5% for the month. It’s still up 13.6% for the year. The Dow /zigman2/quotes/210598065/realtime DJIA -0.95%   lost 623.34 points, or 2.4%, to 25,628.90. The average briefly dropped 745 points. The Dow has had five declines of 2% or more this year, with three of them coming this month. The Nasdaq /zigman2/quotes/210598365/realtime COMP -0.83%   gave up 239.62 points, or 3%, to 7,751.77.

Trump also said Friday morning that he was “ordering” UPS /zigman2/quotes/201245396/composite UPS -0.88%  , Federal Express /zigman2/quotes/203047719/composite FDX -0.52%   and Amazon /zigman2/quotes/210331248/composite AMZN -1.68%   to block any deliveries from China of the powerful opioid drug fentanyl. The stocks of all three companies fell as traders tried to assess the possible implications.

Some analysts think the Federal Reserve will lower interest rates this year.

Federal Reserve Chair Jerome Powell indicated last week that the central bank was prepared to cut interest rates but gave no clear signal on when and by how much, while suggesting that uncertainty over Trump’s trade wars have complicated the central bank’s ability to set interest rate policy.

A quarter-point rate cut reduction in September is considered all but certain. Some think the Fed will cut rates again in December.

The price of benchmark crude   fell 71 cents to $53.46 a barrel. It sank $1.18, or 2.1% to settle at $54.17 a barrel Friday, as traders worried that the latest escalation in the trade battle could sap global demand for energy. Brent crude oil  , the international standard, fell 63 cents to $58.71 a barrel.

The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1014%   fell to 105.24 Japanese yen from 106.65 yen Friday.

/zigman2/quotes/210597971/delayed
JP : Nikkei
22,492.68
+40.82 +0.18%
Volume: 0.00
Oct. 18, 2019 3:15p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
26,719.58
-128.91 -0.48%
Volume: 1.54M
Oct. 18, 2019 4:08p
loading...
/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,938.14
-39.19 -1.32%
Volume: 15.00B
Oct. 18, 2019 3:01p
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/zigman2/quotes/210598015/delayed
CN : Shenhzen Stock Exchange
1,616.72
-19.20 -1.17%
Volume: 23.80B
Oct. 18, 2019 3:00p
loading...
/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,060.69
-17.25 -0.83%
Volume: 516,687
Oct. 18, 2019 6:03p
loading...
/zigman2/quotes/210597977/delayed
TW : Taiwan Stock Exchange
11,180.22
-6.66 -0.06%
Volume: 0.00
Oct. 18, 2019 1:31p
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/zigman2/quotes/210597985/delayed
SG : Singapore: SGX
3,114.16
-11.98 -0.38%
Volume: 0.00
Oct. 18, 2019 5:20p
loading...
/zigman2/quotes/210597981/delayed
ID : Indonesia Stock Exchange
6,191.95
+10.93 +0.18%
Volume: 0.00
Oct. 18, 2019 4:00p
loading...
/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,649.70
-35.00 -0.52%
Volume: 633,428
Oct. 18, 2019 4:38p
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/zigman2/quotes/207303954/delayed
JP : Japan: Tokyo
¥ 4,299.00
+4.00 +0.09%
Volume: 8.70M
Oct. 18, 2019 3:00p
P/E Ratio
4.21
Dividend Yield
1.02%
Market Cap
¥8901.82 billion
Rev. per Employee
¥126.96M
loading...
/zigman2/quotes/202054799/delayed
JP : Japan: Tokyo
¥ 21,075.00
+455.00 +2.21%
Volume: 1.03M
Oct. 18, 2019 3:00p
P/E Ratio
30.75
Dividend Yield
0.93%
Market Cap
¥4044.42 billion
Rev. per Employee
¥95.87M
loading...
/zigman2/quotes/203281219/delayed
JP : Japan: Tokyo
¥ 1,355.00
-21.00 -1.53%
Volume: 1.85M
Oct. 18, 2019 3:00p
P/E Ratio
9.22
Dividend Yield
4.43%
Market Cap
¥527.91 billion
Rev. per Employee
¥34.15M
loading...
/zigman2/quotes/200663563/delayed
JP : Japan: Tokyo
¥ 69,500.00
+1,240 +1.82%
Volume: 885,200
Oct. 18, 2019 3:00p
P/E Ratio
43.69
Dividend Yield
0.72%
Market Cap
¥7093.31 billion
Rev. per Employee
¥40.83M
loading...
/zigman2/quotes/204247792/delayed
HK : Hong Kong
HK$ 7.58
-0.01 -0.13%
Volume: 43.77M
Oct. 18, 2019 4:08p
P/E Ratio
14.27
Dividend Yield
2.64%
Market Cap
HK$111.51 billion
Rev. per Employee
HK$1.61M
loading...
/zigman2/quotes/202357413/delayed
HK : Hong Kong
HK$ 11.04
-0.14 -1.25%
Volume: 25.40M
Oct. 18, 2019 4:08p
P/E Ratio
6.22
Dividend Yield
4.62%
Market Cap
HK$112.90 billion
Rev. per Employee
HK$1.84M
loading...
/zigman2/quotes/201441510/delayed
HK : Hong Kong
HK$ 45.75
-0.30 -0.65%
Volume: 6.01M
Oct. 18, 2019 4:08p
P/E Ratio
17.45
Dividend Yield
3.13%
Market Cap
HK$55.29 billion
Rev. per Employee
HK$411,637
loading...
/zigman2/quotes/203421416/delayed
HK : Hong Kong
HK$ 11.88
-0.06 -0.50%
Volume: 57.66M
Oct. 18, 2019 4:08p
P/E Ratio
8.03
Dividend Yield
6.14%
Market Cap
HK$530.41 billion
Rev. per Employee
HK$13.96M
loading...
/zigman2/quotes/209800866/delayed
KR : S. Korea: KRX
49,900.00
-600.00 -1.19%
Volume: 8.48M
Oct. 18, 2019 3:30p
P/E Ratio
10.77
Dividend Yield
2.84%
Market Cap
₩338954.00 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206420319/delayed
KR : S. Korea: KRX
77,400.00
-3,600 -4.44%
Volume: 13.63M
Oct. 18, 2019 3:30p
P/E Ratio
5.49
Dividend Yield
1.94%
Market Cap
₩52941.70 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/204111604/delayed
TW : Taiwan
NT$ 65.10
-0.10 -0.15%
Volume: 2.89M
Oct. 18, 2019 1:30p
P/E Ratio
10.17
Dividend Yield
4.92%
Market Cap
NT$92.08 billion
Rev. per Employee
NT$888.52M
loading...
/zigman2/quotes/200513631/delayed
AU : Australia: Sydney
$ 2.35
0.00 0.00%
Volume: 4.98M
Oct. 18, 2019 4:10p
P/E Ratio
9.30
Dividend Yield
0.85%
Market Cap
$5.36 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203084975/delayed
AU : Australia: Sydney
$ 28.84
-0.24 -0.83%
Volume: 5.30M
Oct. 18, 2019 4:10p
P/E Ratio
14.46
Dividend Yield
6.52%
Market Cap
$100.45 billion
Rev. per Employee
$1.09M
loading...
/zigman2/quotes/201448516/delayed
AU : Australia: Sydney
$ 34.79
-0.07 -0.20%
Volume: 5.33M
Oct. 18, 2019 4:10p
P/E Ratio
14.64
Dividend Yield
5.51%
Market Cap
$175.92 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,986.20
-11.75 -0.39%
Volume: 1.99B
Oct. 18, 2019 5:08p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
26,770.20
-255.68 -0.95%
Volume: 293.61M
Oct. 18, 2019 5:08p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,089.54
-67.31 -0.83%
Volume: 1.82M
Oct. 18, 2019 5:16p
loading...
/zigman2/quotes/201245396/composite
US : U.S.: NYSE
$ 117.35
-1.04 -0.88%
Volume: 2.72M
Oct. 18, 2019 6:30p
P/E Ratio
21.45
Dividend Yield
3.27%
Market Cap
$100.84 billion
Rev. per Employee
$149,503
loading...
/zigman2/quotes/203047719/composite
US : U.S.: NYSE
$ 149.91
-0.79 -0.52%
Volume: 2.79M
Oct. 18, 2019 6:30p
P/E Ratio
92.89
Dividend Yield
1.73%
Market Cap
$39.11 billion
Rev. per Employee
$304,846
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 1,757.51
-29.97 -1.68%
Volume: 3.37M
Oct. 18, 2019 4:00p
P/E Ratio
72.92
Dividend Yield
N/A
Market Cap
$869.36 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/210561789/realtime/sampled
US : Tullet Prebon
108.3650
-0.1100 -0.1014%
Volume: 0.0000
Oct. 18, 2019 4:59p
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