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© Reuters. FILE PHOTO: Market prices are reflected in a window of the TSE in Tokyo
By Hideyuki Sano and Daniel Leussink
TOKYO (Reuters) – Asian stocks fell on Thursday after US giant telecom giant Huawei hit hard, death-threatening sanctions
strengthen Sino-US trade relations.
The largest MSCI index of Asia-Pacific equities outside Japan retreated 0.2%, not far from its lowest level since the end of January.
Japan lost 0.6%, banks were penalized by low earnings, South Korean stocks also lost 0.6% and Chinese blue chips fell 0.2%.
Asian equities remained stable at the start of trading after the announcement that US President Donald Trump was planning to delay tariffs on auto imports, providing much needed relief to markets hit by a resurgence in trade. trade tensions and weak US and Chinese economic data.
Circumventing the downward trend, Australian equities remained stable as weaker than expected local employment data corroborated expectations of a central bank policy rate.
The US Department of Commerce announced on Wednesday that it was adding Huawei Technologies Co Ltd and 70 subsidiaries to its "List of Entities" – a decision that bans the company from acquiring components and technologies from US companies without the Government approval.
"There has been a growing disconnect between Asian markets and US markets in the last six months," said Nick Twidale, director of operations at Rakuten Securities Australia in Sydney.
"US markets have been supported by President Trump, who may have reduced car rates in Europe and Japan, but Asian markets have realized that he is not loosening the trade war against China." ", he added.
Wednesday, Wall Street shares continued their rebound, their gain of 0.58% and the world's widest index of global stocks MSCI rebounding after a low for two months on Tuesday. ()
Still on Wednesday, less than a week after Washington imposed higher tariffs on $ 250 billion worth of imports from China, US Treasury Secretary Steven Mnuchin said he would likely visit Beijing soon to continue trade negotiations with its Chinese counterparts.
The positive evolution of overnight trade helped to dissipate the feeling of risk that had been dampened earlier in the session by poor economic data.
China reported surprisingly weaker growth in retail sales and industrial production in April, with overall retail sales recording the smallest increase since May 2003.
In the United States, retail sales fell unexpectedly in April, as households cut back on purchases of motor vehicles and a range of goods, while industrial production fell 0.5% in April. the third drop recorded this year.
CUTTING PRICES
The weakness of the data underlies US bond prices, leading to a further decline in yields.
The yield on 10-year US Treasury bonds dropped to 2.371%, close to its 15-month low of 2.340% on March 28th.
The two-year bond yield reached a minimum of 15 months at 2.139% on Wednesday and stood at 2.1616%.
Federal funds rate futures are fully reducing rates by the end of the year and more than a 50% chance of moving by September.
"The markets are gradually setting a rate cut.This is a radical change from last year, while the consensus was three to four rate hikes a year," said Akira Takei, manager of bond funds at Asset Management One.
On the foreign exchange market, the Australian dollar has reached its lowest level since early January, after the fall of full-time jobs in the country. The central bank could be forced to lower rates to boost its economy.
"National data is starting to come in. We are also seeing more and more worries globally," said Rakuten's Twidale.
"We are hoping more and more to have a cup in June or at the Reserve Bank of Australia meeting after that."
Against the yen, the dollar fell by a tenth of a percent to 109.49.
The euro rose 0.1% to 1.11208 dollar.
Oil prices rose in anticipation of rising tensions in the Middle East, affecting global supply despite an unexpected increase in inventories.
rose 0.5% to $ 72.10 per barrel, while the US West Texas Intermediate (WTI) crude reached $ 62.35, also up half a percent.
The United States on Wednesday withdrew staff from its embassy in Baghdad, apparently concerned about alleged Iranian threats.
The sabotage of oil tankers, no one has claimed responsibility, and Saudi Arabia's announcement on Tuesday that armed drones have hit two of its oil pumping stations have caused Washington and Tehran to get closer. conflict.
Gold declined slightly to $ 1,295.6 ounce.
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