Asian stocks fall after US-China trade war anxiety sees Wall Street bleed
Asia stocks recorded their biggest drop in a week overnight after US-China trade tensions left American stocks bleeding red yesterday.
The Nikkei 225 fell 0.6 per cent to 21,456 while Hang Seng sank 0.6 per cent to 25,741 after US markets tumbled amid rising anxiety before crunch talks between Washington and Beijing.
Read more: Global stock markets bleed red on trade war fears
MSCI’s broadest index of Asia-Pacific shares was also down 0.61 per cent.
Wall Street suffered a blow too yesterday after the US extended its blacklist on buying US products to almost 30 Chinese organisations.
Those now include some of China’s biggest AI startups, as President Donald Trump’s administration lashed out at China for its treatment of Muslim minorities.
The US also imposed visa restrictions on Chinese officials associated with the Muslim crackdown.
“You can see why traders aren’t overly optimistic for the trade talks that will take place tomorrow,” CMC Markets analyst David Madden said.
“It’s not a great sign that tensions are already creeping up in advance of the negotiations, but at least they are going ahead.”
Deutsche Bank researcher Jim Reid warned that progress between the US and China on ending their trade impasse took “a backward step” ahead of this week’s talks.
“It looks like this week’s negotiations will be held in quite a tense atmosphere,” added London Capital Group senior market analyst, Ipek Ozkardeskaya.
“The trade war between the US and China is taking a perilous political turn. If it comes down to an ideology clash, then the world should prepare for further disruptions in global trade.”
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Meanwhile he added that UK-EU Brexit negotiations have “unravelled”.
“The relationship between the two sides seems to be in danger of breaking down completely,”. he added.