Asian market down over 5% while US-China Trade heighten
May 6, 2019 | Monday
Asian stocks decline in Monday afternoon trade upon a re-escalation within the U.S.-China trade tensions. At the same time, United States President Donald Trump declares to have an impending increase in tariff rates for Chinese goods worth $200 billion.
Meanwhile, the Chinese mainland markets drop at the end of the morning session. Shanghai Composite, Shenzhen component and Shenzhen composite went down for more than 5 percent each.
In Hong Kong, the Hang Seng index fell 3.31 percent. ZTE, Hong Kong-listed shares of Chinese telecommunications equipment also fell by more than 10 percent as the company gets caught in the middle of Beijing and Washington trade tension. Moreover, its counterpart, Shenzhen-listed also fell by 8.62 percent. Meanwhile, ASX 200 from Australia also fell 0.9 percent as all sectors decline. The MSCI Japan index plunged 2.02 percent during 12:13 HK/SIN.
On stateside, the futures are in a steep decline opening. The Dow Jones Industrial Average futures implies an opening decline of more than 500 points as of Monday morning stateside. Moreover, the S&P 500 and Nasdaq-100 Index futures pointed out a decline during Monday's open at about two indexes.
On Sunday, President Trump said in a tweet that about 10 percent levies on the $200 billion worth of China's goods are to rise 25 percent on Friday. Trump also warns to impose a 25 percent tariff on $325 billion additional Chinese goods.
As of now, China considers canceling the trade talks with the United States this week due to Trump's threats. According to Rodrigo Catril, National Australia Bank senior foreign-exchange strategist, Trump's mood this week is his way of "expressing dissatisfaction" on China's trade agreement with Beijing "attempt to renegotiate."
Catril added that the "increase in tariffs" could be a "bad news" for risk assets and could threaten the plan for "global growth recovery."
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