Asia-Pacific equities in choppy waters
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9 per cent to the lowest since July 2017, extending losses from last week when it dropped 3.5 per cent for its worst weekly showing since mid-March.
Beijing had warned of retaliation if Washington launches any new trade measures. But it is running out of room to match them dollarfor-dollar, raising concern it would resort to other measures, such as weakening the yuan or taking action against US companies in China.
Chinese shares were battered with the blue-chip index off 1.4 per cent. Shanghai’s SSE Composite fell 1.2 per cent and Hong Kong’s Hang Seng index shed 1.3 per cent. Japan’s Nikkei ended 0.3 per cent higher after revised second-quarter data showed the world’s thirdbiggest economy grew at its fastest pace since 2016. burdened by high private debt. They also noted a “concentration risk” from some of the world’s largest funds’ heavy investments in emerging-market assets.
“Given the latest comments from Trump, investors are likely to see the potential for further depreciation in EM currencies with the trade war cranking up yet another notch,” said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia.
The Australian dollar, a proxy for Chinese growth because of the large amount of metals it sells there, hovered near its lowest in two-and-a-half years and was last at $0.7115.
Copper tumbled over 1.2 per cent to cement the 20 per cent drop it has seen already this year. Spot gold was lower at $1,193.01. Oil prices bucked the trend, after three straight days of losses. US crude futures were up 44 cents at $68.20 per barrel and Brent crude futures added 52 cents to $77.35 a barrel.