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By Shinichi Saoshiro
TOKYO (Reuters) – Global stock markets benefited from a sell-off on Tuesday as the United States and other major economies dismissed investors from risky assets, lifting US safes and now the dollar on the defensive.
Markets in China – the epicenter of trade tensions with the United States – have been particularly affected. Asian equity losses were widespread after the fall of Wall Street overnight, with the S & P 500 and Nasdaq experiencing their largest losses in more than two months overnight.
The broadest index of MSCI Asia Pacific shares outside Japan fell 0.75%.
Hong Kong's Hang Seng fell 1.2%, the Shanghai Composite Index 1.4% and the Japanese Nikkei 0.5%.
Shares of technology-intensive regions such as KOSPI and Taiwan in South Korea fell by 1% and 0.9% respectively.
Taiwan Semiconductor Manufacturing Co. fell 1.15%, South Korean chip maker SK Hynix Inc 0.8% and Japanese Tokyo Electron 1%.
US technology stocks have been particularly affected. Token makers who derive much of their revenue from China were beaten Monday after a report that the US Treasury Department was drafting measures that would prevent companies with at least 25% of Chinese buying technology companies US .
In addition to trade talks with China, the United States has recently raised the bar by challenging the European Union by threatening to impose tariffs on cars imported from the bloc.
"The increasingly belligerent commercial rhetoric that the United States employs could begin to influence the economy by cooling investor sentiment and reducing corporate capital spending," said Masahiro Ichikawa, strategist at Sumitomo Mitsui. Asset Management.
"It turns out to be a long-term bearish for the financial markets because it is unlikely that the United States will recede at least through its mid-term elections."
The dollar index versus a basket of six major currencies changed little at 94.240 after plunging 0.25% overnight, when it dropped for the fourth consecutive session.
The greenback has come under pressure as long – term yields in the US Treasury have fallen to lows of one week due to heightened risk aversion on the financial markets.
The euro has oscillated just below an 11-day high of $ 1,1705, reduced overnight against the dollar's dip.
The US currency was down 0.25% to 109,490 yen, after falling to a two-week low of 109,365 on Monday. The yen often attracts bids in times of political turmoil and market turmoil.
Brent crude oil futures increased 0.3% to $ 74.95 due to uncertainty surrounding Libyan exports. Contracts had slipped 1% overnight, as appetite for investors' risk of decline weighed on commodities.
Oil prices fell after OPEC and its allies agreed Friday to increase global supplies, albeit modestly.
Trade concerns drove copper from the London Metal Exchange down 0.3% to $ 6,734.50 per tonne, although the tense global environment supported gold. Spot prices for the yellow metal edged up 0.1% to $ 1,266.2 an ounce.
(Report by Shinichi Saoshiro, edited by Shri Navaratnam)
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