Asian markets fall as trade war fears loom large
Asian markets fell Monday as fears of a global trade war continue to dog investors, with Donald Trump threatening fresh tariffs on European cars and reports he is considering curbs on Chinese investment in the US.
There was little sign of relief after equities suffered a plunge last week in response to tit-for-tat warnings by Beijing and Washington, which has fuelled concerns about the potential damage to the world economy, AFP wrote in a report.
The uncertainty overshadowed a modest increase in oil output agreed by OPEC and Russia and Chinese easing measures.
Tokyo ended 0.8 percent lower, while Hong Kong and Shanghai were both off more than one percent. Sydney lost 0.2 percent and Singapore shed 0.8 percent.
Taipei and Manila were both one percent lower, while Seoul and Wellington barely moved.
In early European trade London fell 0.7 percent, while Paris and Frankfurt each shed 0.6 percent.
Concerns the tariff spat could turn into a full-blown trade war were stoked Monday following reports that the Treasury Department is looking at an emergency law beefing up scrutiny of investment by Chinese firms in sensitive US industries.
Treasury Secretary Steven Mnuchin is expected to push the plan this week, AFP quoted a report by Bloomberg News.
"This one could well result in an escalating trade war," Lee Ferridge, a macro strategist at State Street Corp., told Bloomberg TV. "Volatility is going to continue to rise from here."
While broad markets are taking another hit, energy firms in Asia were mostly up after OPEC agreed to increase oil production by around a million barrels a day from July.
But officials admitted actual output would likely be much lower as some countries struggle to lift production, AFP added.
Brent jumped more than three percent on Friday while WTI climbed more than four percent, though both contracts dipped Monday on concerns about the impact a trade war would have on demand.
On currency markets the Turkish lira, which had lost some 20 percent in value against the dollar this year, surged about three percent after President Recep Tayyip Erdogan scored a decisive election victory, soothing worries of a prolonged period of political uncertainty.
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