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Asian Shares Fall As Trade Risks Mount

asianmarket 021219 21may20 lt

Asian stocks fell broadly on Thursday as fears of U.S.-China tensions as well as deteriorating relations between Canberra and Beijing kept investors' risk appetite in check.

China's Shanghai Composite Index fell 15.81 points, or 0.6 percent, to 2,867.92 ahead of the country's postponed annual session of its parliament starting the next day. Hong Kong's Hang Seng Index dropped 0.5 percent to 24,280.03.

Japanese shares drifted lower after four days of gains as investors digested weak economic data. The downside was capped amid optimism about a state of emergency being lifted in western Japan later today.

The Nikkei 225 Index slipped 42.84 points, or 0.2 percent, to 20,552.31, while the broader Topix closed 0.2 percent lower at 1,491.21.

The manufacturing sector in Japan continued to contract in May, and at a faster pace, the latest survey from Jibun Bank revealed with a manufacturing PMI score of 31.7, down from 34.7 in April.

The report also showed that the services PMI improved to 25.3 in May, up from the record low 21.5 in April but still well below the line for expansion.

Separately, official data showed that Japan posted a merchandise trade deficit of 930.401 billion yen in April - missing expectations for a shortfall of 560 billion yen following the 4.9 billion yen surplus in March.

Exports plummeted 21.9 percent year-on-year, beating expectations for a fall of 22.7 percent following the 11.7 percent decline in the previous month.

Imports were down an annual 7.2 percent versus expectations for a drop of 12.9 percent after slipping 5.0 percent a month earlier.

Australian markets fluctuated before ending lower after Beijing imposed new customs inspection procedures on iron ore imports.

The benchmark S&P/ASX 200 Index dropped 22.60 points, or 0.4 percent, to 5,550.40, while the broader All Ordinaries Index ended down 19.20 points, or 0.3 percent, at 5,660.90.

As countries across the world ease lockdown measures, Australian officials on Wednesday announced a raft of plans to restart public life and reinvigorate its economy.

Santos rallied 3.3 percent and Beach Energy surged 4.2 percent as oil prices hit a ten-week high on data showing a drop in U.S. crude inventory. Miners BHP and Rio Tinto as well as the big four banks all ended in the red.

Meanwhile, buy-now-pay-later firm Afterpay advanced 2.6 percent after the company said it has signed up 1 million active customers in the U.S. over the past 10 weeks.

Australia's private sector remained in a deep contraction in May as the impact of the coronavirus on the economy remained severe, survey data from IHS Markit showed today.

The Commonwealth Bank flash composite output index rose to 26.4 in May from 21.7 in April. Services again reported the sharper reduction in activity of the two broad sectors covered by the survey, while the downturn in the manufacturing sector intensified.

Seoul stocks rose for a fifth straight session on growing hope over the resumption of global travel and trade. The Kospi edged up by 8.67 points, or 0.4 percent, to 1,998.31. Top chemical firm LG Chem soared 4.1 percent and No. 1 oil refiner SK Innovation added 2.9 percent.

New Zealand shares edged lower as Prime Minister Jacinda Ardern asked businesses and people to think about four-day weeks in a bid to aid the country's ailing tourism industry.

Bars and pubs opened in the country for the first time in months today as the government looks to revive economic activity. The benchmark NZX 50 index ended down 56.51 points, or 0.52 percent, at 10,731.55.

The world's top dairy exporter Fonterra rose over 1 percent after slashing the price it pays farmers for milk for the upcoming season.

U.S. stocks posted strong gains overnight on optimism about an economic recovery as all 50 states relaxed some of their coronavirus restrictions.

Investors also parsed the minutes from the most recent Federal Reserve meeting in April, encouraging earnings news from home improvement retailer Lowe's and a report raising doubts about Moderna's potential coronavirus vaccine.

The Dow Jones Industrial Average rallied 1.5 percent, the tech-heavy Nasdaq Composite jumped 2.1 percent to reach its best closing level in three months and the S&P 500 surged 1.7 percent.

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