Asian markets sank in early trading Monday, as worsening trade tensions between the U.S. and China took hold and fresh protests ground Hong Kong to a halt.
The Wall Street Journal reported Sunday that President Donald Trump overruled his top economic advisers by slapping new tariffs against Chinese goods last week, apparently in response to Chinas inability to commit to increasing purchases of U.S. agricultural products. The Journal reported that last week’s trade talks in Shanghai, the first in months, had been brief and unproductive.
Also Sunday, China’s yuan CNYUSD, -0.0361% weakened below the key seven level with the U.S. dollar, hitting a new all-time low. That could increase tensions with the U.S., which contends that a weak yuan makes China’s exports too cheap, hurting competition.
Hong Kong’s Hang Seng Index HSI, -2.85% dove 3% as protesters called for a general strike that threatened to cripple the city’s morning commute, in the latest mass demonstration by pro-democracy activists. Police clashed with protesters again Sunday. The Shanghai Composite SHCOMP, -1.62% fell 0.8% while the smaller-cap Shenzhen Composite 399106, -1.47% was about flat. Japan’s Nikkei NIK, -1.74% sank 2.4%, and South Korea’s Kospi 180721, -2.56% dropped 2% as trade tensions between the two countries has ratcheted up in recent weeks. Benchmark indexes in Taiwan Y9999, -1.19% , Singapore STI, -1.99% and Indonesia JAKIDX, -2.35% all fell. Australia’s S&P/ASX 200 XJO, -1.90% slipped 1.4%
Among individual stocks, Kobe Steel 5406, -15.17% , Yahoo Japan 4689, -12.50% and SoftBank 9984, -3.48% all tumbled in Tokyo trading. In Hong Kong, HSBC 5, -1.85% fell after its CEO was ousted after just 18 months. Wharf Real Estate 1997, -4.39% and Sands China 1928, -2.34% also fell. Samsung 005930, -2.22% and LG Electronics066570, -3.14% slipped in South Korea, as Foxconn 2354, -1.31% and Taiwan Semiconductor 2330, -1.99% fell in Taiwan. Beach Energy BPT, -2.76% , Rio RIO, -3.46% and Westpac WBC, -1.21% all fell in Australia.