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Global Markets: Stocks slump, yen rises as U.S. raises stakes in trade conflict

Reuters  |  TOKYO 

By Shinichi Saoshiro

(Reuters) - U.S. tariffs on an additional $200 billion worth of Chinese goods sent Asian stocks tumbling on Wednesday, with China's markets leading the declines, as trade tensions between the world's two biggest economies continued to deteriorate.

decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement, senior administration officials said on Tuesday.

The had just imposed tariffs on $34 billion worth of Chinese goods on Friday, drawing immediate retaliatory duties from on U.S. imports in the first shots of a heated trade war. U.S. had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports.

MSCI's broadest index of shares outside fell 1.5 percent. The index had gained for the past two sessions, having enjoyed a lull from the trade war fears that lashed global markets last week.

Hong Kong's Hang Seng slid 2.2 percent and the Shanghai Composite Index slumped 2.4 percent.

and Dow futures were down 0.9 percent and 1 percent, respectively, pointing to a lower open for Wall Street later in the day.

South Korea's lost 1.3 percent and Japan's Nikkei fell 1.8 percent.

"The markets still remain sensitive to the trade-related theme, which is something investors have to take into account for the long term," said Yoshinori Shigemi, at in

"At the same time, the trade dispute can easily be blamed for a variety of ills. But it could mask over factors that could also weigh on equities in the longer run, such as tighter monetary policies led by the "

The yen, often sought in times of political tensions and market turmoil, gained against a number of peers.

The dollar was down 0.1 percent at 110.88 yen, pulled back from a near two-month peak of 111.355.

The euro fell 0.25 percent to 130.11 yen and the Australian dollar lost 0.7 percent to 82.24 yen.

The Aussie, considered a liquid proxy for China-related trades, fell 0.5 percent against the dollar to $0.7422.

China's yuan lost more than 0.5 percent against the dollar and back towards an 11-month low plumbed last week.

The 10-year Treasury note yield fell nearly 4 basis points to 2.8363 percent, pulling back sharply from a one-week peak of 2.875 percent scaled the previous day.

prices fell after the said it would consider requests from some countries to be exempted from sanctions it will put into effect in November that prevents from exporting

Brent crude futures lost 1.25 percent to $77.92 a barrel. had risen the previous day, supported by a larger-than expected U.S. stock draw and supply concerns in and

Copper on sank roughly 3 percent to brush $6,092.50 per tonne, lowest since July 2017.

(Reporting by Shinichi Saoshiro; Editing by and Sam Holmes)

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

First Published: Wed, July 11 2018. 08:25 IST