Shares of Asia are fighting against trade fears, oil holds gains

SYDNEY (Reuters) – Asian stocks were depressed on Wednesday as weak Chinese equities and the yuan weighed on investor sentiment, while the US lobbied the allies to quit. To buy Iranian crude.

The widest MSCI index of Asia Pacific shares outside Japan .MIAPJ0000PUS was down 0.05% after hitting a two-year low on Tuesday. Markets have been hit hard in China, where .CSI300 blue chips hit 13-month lows.

Japan's Nikkei .N225 held up better and was almost flat in early trade.

On Tuesday, US crude oil futures climbed 3.6% after Washington curbed its allies to stop Iranian crude imports.

The market is still recovering after the American Petroleum Institute announced that US crude inventories had fallen much more than expected. [O/R]

Earlier Wednesday, the price of crude oil in the United States was up 8 cents to $ 70.61, while the price Brent LCoC1 climbed 24 cents to 76.55 $ per barrel.

The jump in oil propelled the Wall Street energy sector to 1.4% .SPNY, making it the biggest winner on the S & P 500.

The S & P 500.SPX still managed to add 0.22% in total, while the Dow Jones rose 0.12% and the NASIX .IXIC 0.39% %.

Confusion still reigned over American commercial policy.

The US House of Representatives on Tuesday passed a bill to tighten the rules on foreign investment, boosted by bipartisan concerns over Chinese bids to acquire sophisticated technology in the United States.

Yet President Donald Trump has also endorsed a measured approach to curtailing Chinese investment in US technology companies, saying that a stronger merger review panel could protect sensitive technologies.

"We remain of the opinion that a large-scale" trade war "remains a low probability, although the odds that it has seemed to have increased," said David Hensley, JPMorgan Economist.

He noted that the latest White House tariff threats would cover more than 30% of US imports, or nearly 5% of annual economic output (GDP).

"If all of this happens, and the US trading partners retaliate, it will result in a major supply shock for the global economy, which will increase inflation and reduce growth." .

RETURN TO YUAN WATCHING

In the currency markets, the dollar has regained some ground, although investors still did not know whether the titling rates would eventually bullish or bear for the currency.

Measured against a basket of currencies, the dollar was a firmer fraction at 94,705, after surging 94.171 on Tuesday. The EUR = Euro had returned to $ 1.1648, after taking profits at a high of $ 1.1720 overnight.

The dollar also rallied to 110.12 JPY yen =, though that left it just in the middle of the recent trading range of 109.20 / 110.90.

The dollar was helped in part by recent gains on the Chinese yuan, which had stirred speculation that Beijing was weakening its currency to support exports.

The dollar climbed 0.7% to a six-month high of 6.5880 yuan CNH = D3 in offshore trading up nine straight sessions.

All eyes were now on where the central bank of China would establish the opening correction. The yuan CNY = CFXS ended at 6.5560 on Tuesday.

In the commodities markets, gold was apparently no longer considered a safe haven by investors and reached its lowest level in more than six months.

The spot gold XAU = was the last at $ 1,258.30 having hit its lowest since mid-December at $ 1,254.16.