Asian Shares Slide On Trade War Fears

(RTTNews) - Asian stocks fell sharply on Tuesday, though markets ended well off their day's lows after China set the midpoint for its currency at a stronger than expected level.

Underlying sentiment remained cautious after the U.S. Treasury Department designated China a currency manipulator and China confirmed it has halted purchases of U.S. farm products.

Chinese markets ended off their day's lows as the yuan stabilized to hold above 7.00 per dollar, suggesting the People's Bank of China is not ready to let the currency slip further just yet.

The benchmark Shanghai Composite Index ended down 43.94 points or 1.6 percent at 2,777.56, while Hong Kong's Hang Seng Index dropped 175.08 points or 0.7 percent to 25,976.24.

Japan's Nikkei 225 Index briefly hit a seven-month low before regaining ground to end the session down 134.98 points or 0.7 percent at 20,585.31. The broader Topix closed 0.4 percent lower at 1,499.23.

The Nikkei sank more than 600 points, or nearly 3 percent, earlier in the session on concerns over escalating U.S.-China trade tensions.

China-exposed companies and automakers paced the declines. Toyota Motor, Taiyo Yuden and Isuzu Motor dropped 2-3 percent.

On the data front, average household spending in Japan was up 2.7 percent year-on-year in June, the Ministry of Communications and Internal Affairs said - coming in at 276,882 yen. That beat expectations for an increase of 1.2 percent following the 4.0 percent gain in May.

Australian stocks tumbled amid selling across the board. The benchmark S&P/ASX 200 Index plunged 162.20 points or 2.4 percent to 6,478.10, while the broader All Ordinaries Index ended down 164.10 points or 2.5 percent at 6,546.50.

Mining heavyweight BHP shed 0.8 percent, but smaller rival Fortescue Metals Group rallied 2.8 percent. Rare earths miner Lynas Corp. soared 7.9 percent after reports that its Malaysian rare earths processing plant's license is set to be extended. Gold miners also ended on a mixed note.

In the oil & gas sector, Santos tumbled 3.6 percent, Origin Energy slumped 4.7 percent and Oil Search declined 3.1 percent.

The big four banks fell 2-3 percent as the Reserve Bank of Australia left rates on hold after cutting the rate by 25 basis points at each of the previous two meetings.

Tech stocks were among the biggest losers, with Appen losing 3.6 percent and WiseTech Global falling 8 percent.

Australia posted a merchandise trade surplus of A$8.036 billion in June, the Australian Bureau of Statistics said in a report. That beat expectations for a surplus of A$6.0 billion and was up from the upwardly revised A$6.173 billion surplus in May (originally A$5.745 billion).

Seoul stocks fell for the fifth straight session after Washington labeled Beijing a currency manipulator. U.S. Treasury Secretary Steven Mnuchin said Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing. The Kospi ended down 29.48 points or 1.5 percent at 1,917.50.

South Korea saw a current account surplus of $6.38 billion in June, the Bank of Korea said - up from $4.95 billion in May. For the first half of 2019, South Korea had a current account surplus of $21.77 billion.

New Zealand shares fell sharply, with the benchmark S&P/NZX 50 Index ending down 178.86 points or 1.7 percent at 10,587.17. Heavyweight a2 Milk Company lost 2.9 percent and electronic payment platform Pushpay Holdings tumbled 3.3 percent.

The unemployment rate in New Zealand stood at a seasonally adjusted 3.9 percent in the second quarter of 2019, Statistics New Zealand said in a report - marking an 11-year low. That was below expectations for 4.3 percent and down from 4.2 percent in the three months prior.

U.S. stocks hit their lowest closing levels in two months overnight as a dramatic escalation of the trade war between the United States and China sparked a global sell-off.

The Dow Jones Industrial Average plunged 2.9 percent, the tech-heavy Nasdaq Composite plummeted 3.5 percent and the S&P 500 lost 3 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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