Asian stocks slide on trade concerns, oil gives up some gains

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.

The S & P500 ESc1's mini-futures contract eased 0.6% at the start of the month as the MSCI's broader Asia-Pacific index outside Japan fell 0.25%. Japan's Nikkei .N225 lost 0.4 percent.

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 optimism that we can muddle through this, but now, unless the United States drops its arms, things will get more and more chaotic," he said. said Hirokazu Kabeya, chief strategist at Daiwa Securities.

While the threat of a real trade war has become all the more real, the MSCI stock index around the world has declined in five of the last six weeks, including last week, when it dropped by one percent – its biggest weekly drop in three months.

Chinese stocks .MICN00000PUS were among the biggest losers, tumbling 3.7% last week, as Trump set fire to Beijing, threatening to hit $ 200 billion of Chinese imports with tariffs from 10%.

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 index CSI300 .CSI300 shares of mainland China rose 0.1 percent in the first exchanges.

On the other hand, the index of global automakers .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 – 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 in a flexible way." But if the Saudis alone are strongly increasing their production, they could be hurt by some other countries, "said Tatsufumi Okoshi, Senior Commodity Economist at Nomura Securities.

"So the markets seem skeptical of what Saudi Arabia can do, we may see profit taking after last week's gains, but the market will be sustained." The focus will then be on the market. increase in production of Saudis in July, "he added.

US crude oil futures were trading at $ 68.36 a barrel, down 0.3 percent the day after Friday's 4.6 percent rise.

The international benchmark Brent LCOc1, however, lost 2.0% to 74.08 dollars a barrel, dropping more than half of its gains on Friday.

On the forex market, the euro held steady at 1.1656 EUR = rebounding after hitting its 11-month low, at 1.1508 on Thursday.

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% to JPY = 109.50 yen, reaching its lowest level in two weeks, with the yen firming on worries about global trade frictions.

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 latest pound was trading at $ 4.665 for a TRYTOM dollar = D3, up 0.5% from 4.66625 at the end of last week, but down from the high of the day of 4.5870.

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 rose to $ 6,155 BTC = BTSP.