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Asian Shares Drift Lower On Tariff Worries

markets 111714 04jul18

Asian stocks edged lower on Wednesday as trade jitters continued to simmer ahead of the July 6 deadline, when U.S. tariffs on Chinese goods are due to take effect.

The yen rose against the dollar and the euro advanced amid fading political risks in Germany while oil prices remained supported by data showing a larger-than-expected fall in U.S. stockpiles.

Chinese shares ended lower despite the yuan rising sharply against the dollar following verbal intervention by the People's Bank of China. The benchmark Shanghai Composite index fell 27.76 points or 1.00 percent to 2,759.13.

Hong Kong's Hang Seng index lost 1.06 percent to close at 28,241.67, dragged down by industrials and energy stocks.

Japanese shares retreated as technology stocks followed their U.S. peers lower and index heavyweight Fast Retailing reported a 4 percent fall in same-store sales at its Uniqlo clothing outlets in June.

The Nikkei average dropped 68.50 points or 0.31 percent to 21,717.04 while the broader Topix index finished marginally higher at 1,693.25.

Fast Retailing shares declined 2.2 percent. Advantest, Tokyo Electron and Sumco Corp tumbled 4-5 percent in the tech sector after a Chinese court temporarily barred Micron Technology Inc from selling 26 chip products in the mainland.

In another development, the U.S. government declared another major Chinese telecom company a possible "risk to national security":

In economic releases, the services sector in Japan continued to expand in June, and at a faster rate, the latest survey from Nikkei showed with a PMI score of 51.4, up from 51.0 in May.

Australian shares closed lower as weaker commodity prices pulled down mining stocks and financials also declined after strong gains in the previous session.

The day's economic readings proved to be a mixed bag, with retail sales and services sector data beating expectations while trade balance figures disappointed investors.

The benchmark S&P/ASX 200 index dropped 26.80 points or 0.43 percent to 6,183.40 while the broader All Ordinaries index ended down 29.10 points or 0.46 percent at 6,273.70.

Banks Commonwealth, Westpac and NAB fell between half a percent and 1.3 percent. Miners Rio Tinto and Fortescue Metals Group dropped around 1 percent after copper hit nine-month lows on expectations of weaker demand in top consumer China.

Seoul stocks closed lower on institutional selling amid concerns that trade frictions between the U.S. and other major economies could slow down global growth. The benchmark Kospi slid 7.30 points or 0.32 percent to 2,265.46. Chipmaker SK Hynix shed 1.3 percent and carmaker Hyundai Motor lost 2 percent.

New Zealand shares fell modestly, dragged down by consumer staple and healthcare stocks. The benchmark S&P/NZX 50 index dropped 27.95 points or 0.31 percent to 9,025.64. A2 Milk Company shares tumbled 3.4 percent on profit taking after strong gains in the previous session.

On the economic front, New Zealand's commodity prices decreased for the first time in six months in June, the results of a survey by ANZ showed. The corresponding index dropped 1.0 percent month-over-month, reversing a 1.5 percent rise in May.

Singapore's Straits Times index was moving up 0.2 percent after the latest Nikkei survey showed the country's private sector continued to expand in June, albeit at a slightly slower pace.

Malaysia's KLSE Composite index was gaining half a percent as investors kept an eye on the arrest of former Prime Minister Najib Razak in relation to the probe into SRC International.

Overnight, U.S. stocks fell ahead of the July 4th holiday and the July 6 deadline for the Trump Administration's planned imposition of tariffs on Chinese imports.

The Dow and the S&P 500 dropped around half a percent, while the tech-heavy Nasdaq Composite shed 0.9 percent.

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