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By Hideyuki Sano
TOKYO (Reuters) – Asian stocks fell on Monday following escalating trade tensions between the United States and major economies, while oil prices gave up their gains after major producers agreed to modest increase in production.
Mini-contracts S & P500
The falls were sparked by a Wall Street Journal report that US President Donald Trump intends to prevent many Chinese companies from investing in US technology companies and blocking exports. additional technologies to China.
"Until last week, there was a vague hope that we could manage, but now, unless the United States drops its arms, things will become more chaotic," said Hirokazu Kabeya, global strategist at Daiwa Securities.
As the threat of a full-fledged trade war has become all the more real, MSCI's assessment of stocks around the world <.MIWD00000PUS> has fallen in five of the last six weeks, including last week, when it fell by one percent – its biggest weekly decline in three months.
Chinese shares <.MICN00000PUS> were among the biggest losers, tumbling 3.7% last week, while Trump was setting fire to Beijing, threatening to hit $ 200 billion of Chinese imports with 10% tariffs.
Policymakers in China have reacted quickly to calm the negative effects of the trade dispute with the United States, the Chinese central bank announced Sunday that it would reduce by 50 basis points the amount of cash that some banks must hold as reserves.
The reduction in reserves, the third by the central bank this year, has been widely anticipated by investors and aims to accelerate the pace of debt-for-equity swaps and encourage small businesses.
After the move, the CSI300 index <.CSI300> Chinese mainland stocks rose 0.1 percent in early trade.
On the other hand, the index of global car manufacturers <.MIWO0AC00PUS>, which lost 4.7% last week, remained weak.
Trump has threatened to impose a 20% rate Friday on all car imports assembled at the EU, a month after his administration launched an investigation into whether auto imports accounted for a threat to national security.
A senior European Commission official said Saturday that the European Union would react to any US initiative to raise tariffs on cars made in the bloc.
(Graph: EU Exports and Imports from the United States – https://tmsnrt.rs/2MUPYOo)
Investors and traders worry that the threat of higher US tariffs and retaliation by others could derail a rare period of synchronized global growth.
Oil prices were supported after OPEC producers and non-OPEC countries agreed to a modest increase in production next month without announcing oil prices. 39; precise objective for the increase of production.
OPEC and non-OPEC countries said in their statement that they would increase supply by returning to 100 percent compliance with previously agreed production cuts, after months of underproduction.
"In reality, there are not many countries that can increase yields, only Saudi Arabia having the capacity to increase production flexibly, but if the Saudis alone are strongly increasing their productions, they could be affected by some other countries ". Senior Commodity Economist at Nomura Securities.
"The markets seem so skeptical about what Saudi Arabia can increase, we could see profit taking after last week's gains but the market will be supported, the focus will then be put on it." increase in production by the Saudis in July ". .
US crude oil futures traded at $ 68.36 per barrel
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In the currency market, the euro is maintained at $ 1.1656
The euro climbed Friday as traders were encouraged by improved data on regional economic growth and new assurances given by Italian politicians that their country would not leave the single currency.
Activity in Germany and France, the first two economies in the euro area, recovered in June despite trade tensions between Europe and the United States, according to data from the US. IHS Markit.
The dollar fell 0.4 percent to 109.50 yen
The Turkish lira gained up to 1.6% on the expectations of a stable government after Tayyip Erdogan and his ruling party, the AKP, won Sunday's presidential and legislative elections in Turkey.
But his victory has kept worries about inflation and the independence of the central bank, given recent comments from Erdogan suggesting he wants to take greater control of monetary policy. .
The last book was trading at 4,665 for a dollar
Bitcoin has stabilized after reaching a seven-month low over the weekend while the security of cryptocurrency trading operators has been subjected to more scrutiny.
Digital money fell to $ 5,780 and stood at $ 6,155
(Edited by Shri Navaratnam and Jacqueline Wong)
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