SYDNEY, May 7 2019 : Asian shares wallowed near five-week lows on early today after U.S. President Donald Trump’s threat to raise tariffs re-ignited worries about U.S.-China trade tensions while Japan’s Nikkei opened down after a 10-day break.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped as much as 0.2 percent to five-week low marked yesterday.
Japan’s Nikkei shed 1.1 percent to 22,006.58, taking a delayed hit after the country’s financial markets opened after a 10-day market break to mark the ascension of Japan’s new emperor to the throne.
U.S. stock futures for the S&P 500 declined as much as 0.7 percent in Asia today as top U.S. trade officials said China had backtracked on commitments in trade talks.
Their comments came after global financial markets had reeled yesterday after Trump had unexpectedly jacked up pressure on China to reach a trade deal in the midst of negotiations, saying he would hike U.S. tariffs on Chinese goods this week.
Yasuo Sakuma, chief investment officer at Libra Investments in Tokyo said he believed stocks have entered a new downtrend, as investors had growing doubts over whether the United States and China would cut a deal on trade any time soon.
“Investors had been too complacent since the beginning of this year. Now it’s time for ‘sell in May,’” he said.
There was little movement in the currency market, with the euro trading flat at $1.1199, having held in a tight range for the past four sessions, while the dollar was steady at 111.75 yen.
Traders were awaiting an interest rate decision from Australia’s central bank later in the day.
In the commodity market, oil futures edged lower in volatile trade after a gain on Monday, as the cloud cast over the global economy by Trump’s tariff threat offset bullishness resulting from rising tensions between the United States and Iran.
U.S. crude fell 0.2 percent to $62.12 per and Brent crude was 0.3 percent lower at $71.00 per barrel on early today. – Reuters