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Asian markets stumble as trade fears persist

Asian markets stumble as trade fears persist

Business Desk HONG KONG, Sept 12: The sell-off on Asian markets extended into Wednesday with investors fearing an escalation in the US-China trade row after Beijing said it planned to impose anti-dumping sanctions worth billions on Washington. The news adds to a sense of pessimism across trading floors in recent weeks as the world’s top two economic powers stand on the cusp of an all-out trade war that observers fear could batter the global economy. It also comes as dealers struggle to deal with a brewing emerging-market financial crisis and overshadows hopeful noises from Canada that a revised NAFTA deal is “imminently possible”. However, energy firms were broadly higher as oil prices benefited from a sharp drop in US inventories, looming sanctions on Iran and Hurricane Florence’s imminent impact on the Carolinas. China said Tuesday it would ask the World Trade Organization next week for permission to impose more than $7 billion in sanctions annually on the United States over anti-dumping practices. The WTO will discuss the issue on September 21. The case dates back to December 2013, when China took issue with the way Washington assesses whether exports have been “dumped” at unfairly low prices onto the US market. Beijing’s call comes after Donald Trump threatened to impose tariffs on all goods coming from China, which he says is using unfair trade practices that are harming American jobs. He has also railed against his country’s massive trade deficit with China, which hit a record high last month. On Wednesday China’s Vice Premier Hu Chunhua warned that protectionism poses a “serious hazard” to growth and cautioned “individual countries” against isolationism, in a veiled reference to the ongoing row. Hong Kong stocks suffered a sixth straight day of losses Wednesday as investors are jolted by fears about the China-US trade row as well as a brewing emerging markets crisis. The Hang Seng Index fell 0.29 percent, or 77.51 points to 26,345.04. The benchmark Shanghai Composite Index lost 0.33 percent, or 8.69 points, to end at 2,656.11 and the Shenzhen Composite Index, which tracks stocks on China’s second exchange, fell 0.43 percent, or 5.74 points, to 1,403.60. Tokyo stocks ended lower on Wednesday as investors locked in profits a day after the benchmark index rose 1.30 percent. The benchmark Nikkei 225 index lost 0.27 percent or 60.08 points to close at 22,604.61, while the broader Topix index fell 0.45 percent or 7.59 points at 1,691.32. The Japanese indices followed Wall Street to rise marginally at the open but quickly dropped back into negative territory. The dollar fetched 111.53 yen in Asian trade, against 111.57 yen in New York late Tuesday. In Tokyo, Sony was up 0.26 percent at 6,352 yen and game giant Nintendo rose 0.48 percent to 39,340. Automakers were lower, with Toyota falling 0.58 percent to 6,661 yen and Honda dropping 1.79 percent to 3,117 yen. Struggling electronics maker Pioneer plunged 9.30 percent to 117 yen after announcing it had secured up to 60 billion yen ($540 million) in funding from Hong Kong-based investment firm Baring Private Equity Asia. Citizen Watch, which sponsors the Japanese top tennis player Naomi Osaka, who beat Serena Williams in the US Open, rallied for a second straight day, edging up 0.14 percent at 707 yen. Sydney fell 0.1 percent while Wellington and Taipei were each 0.3 percent off. Manila and Bangkok were also lower while Seoul and Singapore were flat. “We are concerned that trade tensions are adding to the downside risks to growth,” Sneha Sanghvi, head of Asian financial markets at Westpac, told Bloomberg TV. “We are seeing heightened volatility and risk aversion in financial markets — that trend is likely to continue for the next few weeks.” The losses came despite a positive lead from Wall Street, where energy firms were boosted by a more than two percent rally in oil and technology firms were supported by bargain-buying. Both main crude contracts extended gains Wednesday, providing support to energy firms, with eyes on the US east coast as Florence barrels in. Japan’s Inpex more than two percent higher and Woodside Petroleum in Sydney 1.6 percent higher. CNOOC put on more than one percent in Hong Kong. “There is a strong possibility Hurricane Florence moves to a Category Five storm before it hits land and it is already a major disruptor on the US east coast gasoline market as mass evacuations stretch supplies and Florence’s heavy rains endangers major fuel pipelines,” said Rodrigo Catril, senior foreign exchange strategist at National Australia Bank. IN Mumbai, the BSE benchmark Sensex recovered by over 100 points and the NSE Nifty reclaimed the 11,300-mark in opening trade Wednesday following fresh purchases made by domestic investors ahead of key macroeconomic data to be released later in the day. However, a weakening trend on other Asian bourses on worries over lingering trade conflict between the US and China forced investors to adopt a cautious approach here. The 30-share Sensex was up 133.29 points, or 0.35 per cent, at 37,546.42 with sectoral indices led by FMCG, power, IT, teck, infrastructure and PSU stocks trading in the positive zone. The gauge had plunged 976.69 points in the previous two sessions as global trade war tensions rattled investor sentiment. Also, the NSE Nifty was trading higher by 52.60 points, or 0.46 per cent, at 11,340.10. Brokers said that building up of positions by domestic institutional investors (DIIs) ahead of index of industrial production (IIP) for July and inflation data for August — to be released later in the day — too impacted investor sentiment. In the Sensex kitty, PowerGrid emerged as top gainer surging by 2.76 per cent, followed by ITC, ONGC, Adani Ports, HUL and Coal India. Others that also supported the key indices include M&M, Infosys, Wipro, Vedanta, HDFC, TCS and Kotak Bank, which rose up to 1.51 per cent. US stock index futures were flat early on Wednesday, held back by worries over the Sino-U.S. trade war, while Apple shares moved higher ahead of the expected launch of new iPhone models. Shares of Apple rose 0.4 percent in premarket trading, ahead of an event at 1 p.m. ET in which it is expected to three new iPhone models. Shares of energy companies were among the top gainers on the S&P 500 as oil prices hovered near $80 per barrel on growing concern over global supply. Chevron’s 0.9 percent gain was the most among the Dow .DJI components trading premarket. Lingering worries over an escalation in trade dispute got a fresh impetus on Tuesday after President Donald Trump said Washington was taking a tough stance with China, cementing expectations that fresh levies on Chinese exports will soon be announced. More than 60 U.S. industry groups are launching a coalition to take the fight against Trump’s tariffs public. At 7:38 a.m. ET, Dow e-minis 1YMc1 were down 19 points, or 0.07 percent. S&P 500 e-minis ESc1 were down 1.5 points, or 0.05 percent and Nasdaq 100 e-minis NQc1 were up 2.5 points, or 0.03 percent. Gilead Sciences rose 3 percent after its rheumatoid arthritis drug, being developed jointly with Galapagos NV, met the main goal of a study. Micron (MU.O) fell 3.7 percent after Goldman Sachs cut its rating on expectations of lower prices for memory chips due to an oversupply of DRAM and NAND chips. Goldman Sachs said the same condition would hit Seagate Technology and Western Digital, echoing other brokerages. Seagate dropped 2 percent and Western Digital fell 1.5 percent. In early European trade London was flat, while Paris and Frankfurt each rose 0.2 percent. (Inputs taken from agencies)

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