Shares of Asia are hampered by trade fears, oil extends gains

SYDNEY (Reuters) – Asian stock markets were under pressure on Wednesday, as weak Chinese equities and the yuan weighed on investor sentiment, while the US lobbied its allies to quit. to buy Iranian crude.

The widest MSCI index of Asia Pacific shares outside Japan .MIAPJ0000PUS still lost 0.3% after hitting a two-year low on Tuesday.

Chinese blue chips .CSI300 declined 0.4 percent to be a mustache above 13-month lows as a settlement of Sino-US tensions remained a distant prospect.

The Nikkei .N225 from Japan was doing better but quickly succumbed to risk aversion and fell by 0.5%.

The fragile mood eclipsed the gains in energy stocks made after the news broke that Washington has pushed allies to stop imports of Iranian crude oil.

The price of crude oil in the United States rose 18 cents to $ 70.71, jumping 3.6% overnight, while Brent LCoC1 rose 17 cents to 76 cents, $ 48 a 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.

But the S & P .SPX still managed to add 0.22% to the total, while the Dow Jones rose 0.12% and the Nasdaq .IXIC 0.39 %.

Confusion remained the word of the 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 foreign exchange markets, trade-sensitive currencies, including the Australian and New Zealand dollars, lost ground while the safe-haven yen found demand. The kiwi dollar hit a seven-month low of 0.6817 NZD = D4.

The US dollar was broadly stable against a basket of currencies at 94.647, after jumping 94.171 on Tuesday. The EUR = Euro was back at $ 1.1650 after taking profits at a high of $ 1.1720 overnight.

Still, the dollar could not sustain gains on the yen and it returned to 109.87 after a start of 110.12 JPY.

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 People's Bank of China (PBOC) set the midpoint of the CNY = PBOC yuan at a six-month low of 6.5569 per dollar on Wednesday. This was down 0.6 percent from the previous one, but actually a little stronger than market expectations.

However, the spot rate continued to plummet, with the yuan exceeding 6.6600 per dollar for the first time since December.

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 $ 1,254.66 having hit its lowest since mid-December at $ 1,253.50.