Logo of Phnom Penh Post newspaper Phnom Penh Post - Trade war unease weighs on Asian markets

Trade war unease weighs on Asian markets

Trade war unease weighs on Asian markets

Asian markets were mixed on Monday as investors digested reports in US media late last week that US President Donald Trump is mulling severe new restrictions on investment in China.

Shanghai and Tokyo slumped the day before a week-long patriotic holiday begins in China, despite assurances from the US Treasury that there were no plans to stop Chinese companies from listing on US exchanges.

On Tuesday, the Asian giant celebrates 70 years since the founding of communist China, with markets closed from October 1 to 7, while planned pro-democracy protests in Hong Kong threaten to disrupt festivities.

Shanghai closed down 0.9 per cent as some investors took profits, with uncertainty fuelled by fears of an escalation in the Sino-US trade war that has raged for more than a year.

“The Sino-US trade negotiations have been full of twists and turns,” said Zhang Gang, an analyst with Central China Securities.

“You don’t know what remarks Trump would make in the next seven days, or what variables there will be from the US side. So, [investors] have set themselves in a low-key, waiting position.”

It came after China posted better-than-expected manufacturing data for September, but factory activity remained in contraction for the fifth month running.

“A lot of retail guys are taking money out of the stock market ahead of the holiday week,” Gerry Alfonso, director of the international business department at Shenwan Hongyuan Group, told Bloomberg.

On Friday, stocks fell into the red after multiple US media reports said the White House was considering proposals to de-list Chinese companies from US stock markets, or block US investment in China.

Stephen Innes, Asia Pacific market strategist at AxiTrader, said in a note that the US Treasury’s weekend statement had calmed some nerves, but “didn’t exactly clarify the White House position, nor did it rule out other courses of action”.

“Unquestionably, floating this story at a time when US-China harmony is most needed suggests the US administration isn’t exactly rolling out a red-carpet welcoming party for China’s high-level trade negotiators,” he said.

The world’s two biggest economies have imposed tariffs on hundreds of billions of dollars in bilateral trade, and Trump’s reported threats appeared intended to ratchet up pressure on Beijing ahead of trade talks scheduled for October.

The US president has said in recent weeks that China may be holding off on reaching a trade deal, betting that he will not be re-elected next year.

Tokyo closed down 0.6 per cent, with analysts saying stocks were weighed down by losses in the US market. Jakarta, Manila and Sydney also fell, but Seoul rose and Wellington gained 0.8 per cent. The Cambodia Securities Exchange index climbed 0.95 per cent.

Hong Kong dipped on opening but recovered to close up 0.5 per cent, with big chemical and telecoms firms leading gains.

Tensions have soared in the semi-autonomous city in recent days, and the weekend was one of the most violent in a summer of unrest.

The financial hub is bracing for further clashes on Tuesday as protesters attempt to draw attention away from Beijing’s huge, tightly choreographed anniversary party.

MOST VIEWED

  • PM responds to Rainsy ticket claims

    Prime Minister Hun Sen on Monday expressed frustration over claims by Sam Rainsy that he had altered Rainsy’s ticket with Thai Airways to prevent him boarding his November 7 flight to Thailand, from where he had claimed he would enter Cambodia. Hun Sen made the

  • Phnom Penh International Airport wins award as passenger traffic soars

    The Phnom Penh International Airport has been awarded Best Asia Pacific Regional Airport 2019 for its sustained high growth in passenger traffic in recent years. The award was presented by the Capa Centre for Aviation (Capa) – a world-leading and trusted organisation that provides market intelligence to

  • PM urges ‘democracies’ to learn from horrors Cambodia faced

    Prime Minister Hun Sen on Tuesday chided countries that he said declared themselves a democracy while supporting a military coup that eventually gave birth to the Khmer Rouge regime. Speaking during the 2nd Asia-Pacific Summit at the Peace Palace, Hun Sen said without naming those

  • Princess Buppha Devi passes away aged 77

    Princess Norodom Buppha Devi, who was famous for her skills and key roles behind the Kingdom’s Royal Ballet, passed away on Monday from unspecified illness at a hospital in the Thai capital Bangkok, according to the official Facebook page of King Norodom Sihamoni. “May

  • PM: Request for release of plotters not due to pressure

    Prime Minister Hun Sen on Saturday said his request to have the supporters of former opposition leader Sam Rainsy and his “coup plot” released on bail was not made under international pressure. Speaking at the groundbreaking ceremony for the construction of 34 roads in Preah Sihanouk

  • Ministry deplores RFA report on EBA

    The Ministry of Foreign Affairs and International Cooperation on Friday deplored as fake news a Radio Free Asia (RFA) report that it had received a copy of the European Commission’s assessment on the human rights situation in Cambodia as part of the Everything But