Asian equities fall to a nine-month low

TOKYO (Reuters) – Asian investors fear that the Trump administration's approach is hurting global economic growth, although the White House's approach to Chinese investment in US technology companies seem to be dwindling.

MSCI ACWI, the world's largest benchmark compiler stock index covering 47 markets, fell 0.17 percent to its lowest level since early April.

European equity futures are expected to fall by 0.2 to 0.3% in major European equity indices, such as the UK FTSE, the French CAC and the German DAX.

US oil prices peaked at 3-1 / 2 years as declining US stocks plunged supply fears into a market already worried about uncertainties in Libyan exports, a disruption of production in Canada, and Washington requests that importers stop buying Iranian crude.

The widest index in the Asia-Pacific region of MSCI outside Japan fell 0.59% to reach a new low close to nine months, while the Japanese average Nikkei stagnated after clearing previous losses.

The US S & P 500 lost 0.60% on Wednesday at its lowest close of a month.

MSCI's largest global stock market indicator fell to its lowest level in nearly three months, of course to post its fourth-worst month in the last five. Its emerging market index has reached its lowest level since mid-August.

In China, equities remained weak after battling concerns over a wobbly yuan and the trade dispute with the United States, which attracted investors for a second half of the difficult year.

"Chinese equities have already slipped into the bear market territory.I suspect investors are not only worried about a trade war, but that they are preparing for the end of the bullish market." by technology, "said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.

"Although it is yet to be seen if it is caused by short-term concerns about global trade, few investors are in the mood to buy stock today."

The Shanghai Composite index hit its lowest level in 25 months as the Shanghai and Shenzhen stock markets, both highly technological, fell into bearish territory.

South Korea's heavy technology KOSPI slid up to 1.33 percent to reach its lowest in nearly 10 months.

Trump said on Wednesday that he would use a strengthened national security review process to thwart China's acquisition of sensitive US technologies, a more flexible approach that imposes restrictions on the security of the US. investment specific to China.

Although US stocks were initially inflated, optimism quickly evaporated after White House economic adviser Larry Kudlow said Trump's remarks did not suggest any easing of the stance. from China.

Markets remain worried about Trump's uncompromising approach to trade relations, with early signs that his position could not only turn against him but also hurt the global economy.

Two major US auto trade groups warned Wednesday the administration that the imposition of customs duties of up to 25% on imported vehicles would cost hundreds of thousands of jobs, would increase considerably vehicle prices and threaten motorist spending.

This decision comes after the American motorcycle manufacturer Harley-Davidson Inc. said earlier this week that it would move production destined for European markets outside the United States to avoid retaliatory tariffs.

"Initially, investors saw Trump's moves as bargaining tactics to get better deals, but now they are starting to worry about damage to the economy," said chief strategist Mutsumi Kagawa. at Rakuten Securities.

"People have long thought that the US economy would end up in a recession at some point, but there are growing concerns that Trump's trade policies may accelerate." The fear is now that "America First" could become "America Worst," he added.

The yield on 10-year US Treasuries dropped to 2.827%, approaching its May 29th low of 2.759%.

A worrying sign for some investors, the US yield curve has further flattened, with the gap between yields at two and ten years narrowing to a low of just 32 basis points in 10 years, or 0, 32 percentage point.

Historically, the US economy has tended to go into recession after the l '. The gap has narrowed to less than zero per cent, reversing the yield curve.

The decline in US bond yields occurred despite the inflationary pressure caused by rising oil prices.

US crude oil futures jumped 3.16% on Wednesday, reaching $ 73.06 per barrel, the highest level since November 28, 2014, under the effect of a tightening of l & # 39; offer.

US crude inventories fell by nearly 10 million barrels last week, while the drop in Canadian exports helped drain the heavy crude oil supply in North America.

White House pressure on other countries to stop all Iranian oil imports is seen as creating a shortage of oil while a power struggle in Libya has left uncertain whether the government internationally recognized or the rebels will manage oil exports.

US crude futures traded for the last time at $ 72.47 per barrel, down 0.40% in Asian trade.

Copper, considered a barometer of the strength of the global economy because of its wide industrial use, reached its lowest level in three months at $ 6,692.5 per tonne.

In the currency market, the major currencies were overshadowing the uncertainties associated with the escalation of trade tensions.

The euro was hit by political uncertainty in Germany, although Chancellor Angela Merkel's coalition partner said she was not looking to dismantle the government.

The common currency rose to $ 1.1547, down slightly to $ 11508 in eleven months a week ago.

The dollar has changed hands at 110.32 yen, up slightly but well within its narrow trading range over the past month. The currency is about to publish its smallest monthly range in nearly four years in June.

The yuan reached a new low of more than six months as China fixed the midpoint of the yuan at its lowest since December 20, 2017.