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Japan Nikkei falls on fresh global trade concerns, weak US data

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The Japan share market declined on Tuesday, 03 December 2019, on tracking losses on Wall Street overnight after disappointing U. S. manufacturing data for November, with Washington's move to reinstate tariffs on steel and aluminum from Brazil and Argentina and higher yen against the US dollar also denting sentiment. At closing bell, the 225-issue Nikkei Stock Average dropped 155.39 points, or 0.66%, to 23,374.11, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange sank 8.13 points, or 0.47%, at 1,706.36.

Total 30 issues of the 33 industry category of Topix index declined into negative territory, with Fishery, Agriculture & Forestry, Pulp & Paper, Iron & Steel, Glass & Ceramics Products, Warehousing & Harbor Transportation Services, and Land Transportation issues being notable losers.

Market fears about global trade tensions resurfaced after US President Donald Trump stunned markets with tariffs against Brazil and Argentina. President Donald Trump decided to restore tariffs on steel and aluminum imports from Brazil and Argentina, attacking what he saw as both countries' "massive devaluation of their currencies." Both South American nations were among a group of U. S. allies that Trump had exempted from steel and aluminum tariffs in March 2018. The Trump administration also proposed tariffs of up to 100% against $2.4 billion of French imports to punish France for a new digital-services tax that hits U.

S. technology companies.

Worsening the mood, data from the Institute for Supply Management (ISM) showed the US manufacturing sector contracted for a fourth straight month at 48.1 in November from 48.3 the month before, as new orders slid. New orders dropped to 47.2 from 49.1, matching a reading from July that was the lowest since June 2012. A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction. That erased the market cheer from upbeat Chinese factory surveys released over the past few days.

Investor optimism that the U. S. and China were nearing a trade deal helped spur the market's milestone-setting run this fall, lifting it from a summer slide brought on by recession fears and uncertainty over trade. The negotiations to end the longstanding trade war could face a tougher path this month following a flareup over Hong Kong, however.

China said on Monday US military ships and aircraft won't be allowed to visit Hong Kong, and also announced sanctions against several US non-government organizations for encouraging protesters to "engage in extremist, violent and criminal acts."

CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, appreciated against greenback. The Japanese yen traded at 109.17 per dollar after strengthening sharply from levels above 109.5 yesterday.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, December 03 2019. 11:52 IST