By Marketwatch and Associated Press
Asian stock markets fell in early trading Tuesday, following Wall Street’s worst day of the year as trade tensions between the U.S. and China grew even worse.
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.18% sank 1.4%, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.05% fell 0.3% and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.63% slid 2.2%. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.74% tumbled 1.2% and the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.22% fell 2.4%. Benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 -0.02% , Singapore /zigman2/quotes/210597985/delayed SG:STI -0.18% , Malaysia /zigman2/quotes/210598052/delayed MY:FBMKLCI +1.08% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.79% were all down as much as 1%.
Many indexes rose from session lows after China’s central bank set the yuan’s reference point higher than expected early Tuesday, 7.0304 in onshore trading against the U.S. dollar and 7.0807 offshore. Still, the yuan declined to 7.0562 in early trading Tuesday.
Among individual stocks, SoftBank /zigman2/quotes/207303954/delayed JP:9984 +0.10% fell in Tokyo trading, as did Toyota /zigman2/quotes/203803129/delayed JP:7203 -3.13% and Fast Retailing /zigman2/quotes/200663563/delayed JP:9983 +2.40% . In Hong Kong, Hang Lung Properties /zigman2/quotes/200230831/delayed HK:101 -1.09% , Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 -0.78% and Sands China /zigman2/quotes/207609245/delayed HK:1928 -1.31% dropped. Samsung /zigman2/quotes/209800866/delayed KR:005930 +0.60% and SK Hynix /zigman2/quotes/206420319/delayed KR:000660 -2.86% dropped in South Korea, while Beach Energy /zigman2/quotes/200513631/delayed AU:BPT +1.25% and Westpac Banking /zigman2/quotes/203084975/delayed AU:WBC -6.36% declined in Australia.
Late Monday, the U.S. Treasury Department labeled China a currency manipulator for the first time since 1994, opening the door to new sanctions and ratcheting up already high trade tensions. Earlier, China’s currency, the yuan /zigman2/quotes/210561112/realtime/sampled CNYUSD 0.0000% , broke a “line in the sand” below 7 U.S. dollars, apparently in retaliation for President Donald Trump’s announcement last week of new 10% tariffs against an additional $300 billion of Chinese goods, effective Sept. 1. China also confirmed it was suspending purchases of U.S. agricultural products.
In a note late Monday, Stephen Innes, managing partner of VM Markets, said of the Treasury Department’s declaration: “While a mostly symbolic gesture, it underscores rising trade tension and does also increase the likelihood of U.S. Treasury intervention which has traders preparing for worst-case scenarios: a protracted equity market sell-off, lower U.S. bond yields while provoking a stampede into safe havens. . . . How the yuan trades today will be critical for the market’s sentiment.”
Earlier, Wall Street suffered its worst day of 2019, with the Dow Jones Industrial Average shedding more than 767 points. The Dow /zigman2/quotes/210598065/realtime DJIA -0.07% ended the day down 2.9%, at 25,717.74 , while the S&P /zigman2/quotes/210599714/realtime SPX +0.48% declined 87.31 points, or 3%, to close at 2,844.74. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.29% shed 278.03 points to finish at 7,726.04, a decline of 3.5%.
U.S. stock futures plunged in early trading Monday, but rallied and were last nearly flat. Dow Jones Industrial Average futures /zigman2/quotes/210407078/delayed YM00 +0.43% , at one point down by about 500, were last down just 30, or 0.1%.
Benchmark U.S. crude rose 32 cents to $55.01 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 97 cents on Monday to close at $54.69. Brent crude , used to price international oils, gained 43 cents to $60.24 per barrel in London. It dropped $1.92 the previous session to $59.81.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.1196% gained to 106.15 yen from Monday’s 106.15 yen.