By Swati Pandey
SYDNEY (Reuters) - Shares faltered and the dollar skidded on Wednesday as investors fretted over the threat of new U.S. tariffs on Chinese imports, brushing aside data that showed the Asian economy got off to a solid start in 2018.
Investor appetite for risk was also hit by U.S. President Donald Trump's move to fire his Secretary of State, regarded as a moderate in his administration, reinforcing market uncertainty about Trump's future policies.
In a sign the equity market sell-off would extend elsewhere, S&P E-Mini futures were down 0.1 percent while FTSE futures slipped 0.3 percent.
Japan's Nikkei dropped 0.8 percent. China's SSE Composite index and the blue-chip CSI 300 fell 0.5 percent each.
Investors suspect policymakers who favour protectionism will also seek to use the currency as a trade weapon, if not overtly then through benign neglect.
As news from the United States dominated, the market shrugged off stronger-than-expected data from China which showed the country's industrial output expanded at a surprisingly faster pace at the start of the year. Fixed asset investment also handily beat forecasts, while retail sales improved from December.
"The economy is well placed to weather any increase in U.S. tariff rates. In fact, the Chinese statistical bureau is tipping 'relatively fast growth' for both exports and consumption in 2018."
"Tillerson's departure has left some worrying that it provides a green light to those in the office pushing for more protectionist measures," analysts at ANZ Bank said in a note to clients. "Protectionism is on the rise."
Since Trump took office in 2017 as many as 35 senior officials from his administration have walked out, including Tillerson, according to Citi.
Tillerson's dismissal and the risk of new import duties on China coincided with subdued U.S. consumer price data on Tuesday with annual core inflation, at 1.8 percent, meeting expectations.
The in-line reading should have been positive for risky assets as it was the fear of a pick-up in inflation and in-turn faster U.S. rate hikes that had hit global shares in early February.
But the inflation data did little to move market expectations of Fed rate rises with an increase next week now fully priced-in.
All that put together meant dollar weakness across a basket of currencies. It eased a tad to 106.5 yen.
The euro rose overnight to edge towards a recent one-month top of $1.2446. It was last at $1.2405, while the pound was firmer at $1.3989.
In commodities, oil prices were mixed U.S. crude up 2 cents at $60.73. Brent fell 10 cents to $64.54.
Spot gold was a touch firmer at $1,327.82 an ounce.
(Reporting by Swati Pandey; Editing by Richard Pullin and Sam Holmes)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)