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Asian Markets Mostly Lower As U.S.-China Tensions Rise

asiancommentary dec24 08oct19 lt

Asian stock markets are mostly lower on Wednesday on fading hopes for a resolution to the U.S.-China trade dispute. Investor sentiment was dampened by rising tension between the U.S. and China after the Trump administration imposed visa restrictions on Chinese officials and also expanded its trade blacklist to include some of China's top artificial intelligence firms.

The Australian market is declining after three straight days of gains, following the weak cues overnight from Wall Street amid worries about the upcoming U.S.-China trade talks.

The benchmark S&P/ASX 200 Index is losing 55.00 points or 0.83 percent to 6,538.40, after falling to a low of 6,520.30 earlier. The broader All Ordinaries Index is down 54.30 points or 0.81 percent to 6,659.40. Australian stocks closed higher for the third straight day on Tuesday.

Among the major miners, Fortescue Metals is lower by almost 2 percent, while BHP Billiton and Rio Tinto are declining more than 1 percent each.

The big four banks - National Australia Bank, Commonwealth Bank, ANZ Banking and Westpac - are losing in a range of 0.6 percent to 1.3 percent.

Commonwealth Bank said it plans to raise A$750 million through a note offering and use the net proceeds to fund its business.

Oil stocks are weak after crude oil prices ended lower overnight. Woodside Petroleum and Oil Search are lower by more than 1 percent, while Santos is down 0.7 percent.

Telstra said it will shut down its 3G network in June 2024 to make room for its 4G and 5G coverage. The telecom giant's shares are down 0.2 percent.

Bucking the trend, gold miner Evolution Mining is rising more than 2 percent and Newcrest Mining is advancing more than 1 percent after gold prices rebounded in electronic trading after ending the regular session slightly lower.

Shares of Clinuvel Pharmaceuticals are gaining more than 39 percent after the U.S. FDA approved the use of the biopharmaceutical company's drug Scenesse to treat a rare genetic disorder that induces skin damage from exposure to light.

In economic news, Australia will see October numbers for the consumer confidence index from Westpac Bank today.

In the currency market, the Australian dollar is lower against the U.S. dollar on Wednesday. The local currency was quoted at $0.6729, down from $0.6751 on Tuesday.

The Japanese market is notably lower and the safe-haven yen strengthened following the weak cues from Wall Street amid worries about rising U.S.-China tensions.

The benchmark Nikkei 225 Index is losing 162.86 points or 0.75 percent to 21,424.92, after touching a low of 21,359.84 in early trades. Japanese stocks rebounded on Tuesday.

In the tech space, Advantest is losing more than 4 percent and Tokyo Electron is declining 1 percent, following their U.S. counterparts lower after the Trump administration expanded its trade blacklist to include some of China's top artificial intelligence firms.

The major exporters are lower on a stronger safe-haven yen. Panasonic is losing more than 1 percent, Canon is declining almost 1 percent, Sony is lower by 0.4 percent and Mitsubishi Electric is down 0.3 percent.

In the auto sector, Toyota Motor is adding 0.2 percent, while Honda Motor is lower by 0.2 percent.

Shares of Nissan Motor are declining almost 1 percent even as the automaker said it has appointed Makoto Uchida, the head of its China joint venture, as the company's new chief executive officer.

Market heavyweight SoftBank is down more than 1 percent and Fast Retailing is lower by 0.5 percent.

Among oil stocks, Japan Petroleum is falling more than 2 percent and Inpex is losing almost 2 percent after crude oil prices declined overnight.

Among the other major gainers, Kansai Electric Power is rising more than 2 percent and Toray Industries is higher by almost 2 percent.

On the flip side, Obayashi Corp. is lower by more than 2 percent.

On the economic front, Japan will release preliminary September figures for machine tool orders today.

In the currency market, the U.S. dollar is trading in the lower 107 yen-range on Wednesday.

Elsewhere in Asia, Singapore, New Zealand, Taiwan, Malaysia and Hong Kong are also lower, while Shanghai and Indonesia are flat. The South Korean market is closed for a holiday.

On Wall Street, stocks closed sharply lower on Tuesday following news the Trump administration imposed visa restrictions on Chinese officials over abuses of Muslim minorities in the Xinjiang region. Optimism about the upcoming U.S.-China trade talks had already waned after a report from the South China Morning Post said China is subtly toning down expectations ahead of this week's negotiations.

The Dow slumped 313.98 points or 1.2 percent to 26,164.04, the Nasdaq plunged 132.52 points or 1.7 percent to 7,823.78 and the S&P 500 tumbled 45.73 points or 1.6 percent to 2,893.06.

The major European markets also moved to the downside on Tuesday. While the U.K.'s FTSE 100 Index slid by 0.8 percent, the German DAX Index and the French CAC 40 Index tumbled by 1.1 percent and 1.2 percent, respectively.

Crude oil futures ended lower on Tuesday as fading optimism about U.S.-China trade talks weighed on prospects for near term energy demand. WTI crude for November ended down $0.12, or about 0.2 percent, at $52.63 a barrel.

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