HONG KONG Asian markets tracked hefty losses in
New York on Wednesday owing to growing China-US tensions ahead of fresh trade
talks, while the pound remained beaten down by fears Britain is on the verge
of crashing out of the EU.
The downbeat mood comes as investors fret over signs the global economy is
slowing down, with the International Monetary Fund forecasting the weakest
growth in a decade owing to long-running tariff disputes.
Days before high-level negotiations were due to resume, the US announced
restrictions on 28 Chinese entities over human rights violations in Xinjiang
province and imposed visa restrictions on some officials.
Then Bloomberg News reported unnamed Trump administration officials had
said the White House was mulling new measures to curtail US investment in the
For its part, Beijing has hit out at the decisions and moved to take steps
against the National Basketball Association in a brewing row over a team
manager's remarks on Hong Kong's protest movement.
It will be interesting to see how it plays out this week between the US
and China, Andrew Balls, at Pacific Investment Management, told Bloomberg
The flare-up comes at a time when we already see growth pretty weak in the
first half of next year and you have at least some evidence of weakness in
manufacturing spilling into services .
While economic data has been increasingly weak in recent months, hopes for
this week's talks have been providing some much-needed support. But the
latest developments were a reminder that progress would likely be rocky.
Talks on the brink
All three main indexes on Wall Street sank and in early trade Hong Kong
fell 0.3 percent while Shanghai lost 0.2 percent.
Tokyo went into the break 0.7 percent lower, while Sydney was also off 0.7
percent, Singapore dropped 0.5 percent and Manila lost one percent.
Wellington, Taipei and Jakarta were also in the red.
There was little support from comments by Federal Reserve boss Jerome
Powell, who said the US economy would continue to expand but that trade wars
and Brexit were causing headwinds.
The remarks suggested the bank was in no rush to cut interest rates
further, with unemployment at a 50-year low, despite jobs creation slowing.
On currency markets, the pound struggled to recover from Tuesday's losses
as Brexit talks between Britain and the European Union teetered on the brink,
with both sides blaming the other with just three weeks until the October 31
Prime Minister Boris Johnson and German Chancellor Angela Merkel were
unable to reach an agreement over the Northern Ireland issue during a
telephone conversation. A Downing Street official quoted Merkel as saying the
Brexit talks were close to breaking down .
With many economists warning a no-deal Brexit could be calamitous for the
British economy, the pound tumbled against the dollar and euro and there were
warnings it could fall even further.
With negative sentiment prevalent across trading floors, the price of oil
extended losses as investors worry about the impact on demand for the
Key figures around 0230 GMT
Tokyo Nikkei 225: DOWN 0.7 percent at 21,442.98 (break)
Hong Kong Hang Seng: DOWN 0.3 percent at 25,817.05
Shanghai Composite: DOWN 0.2 percent at 2,908.10
Pound/dollar: UP at $1.2216 from $1.2213 at 2040 GMT
Euro/pound: UP at 89.73 pence from 89.69 pence
Euro/dollar: UP at $1.0962 from $1.0955
Dollar/yen: UP at 107.10 yen from 107.07 yen
West Texas Intermediate: DOWN 16 cents at $52.47 per barrel
Brent North Sea crude: DOWN 19 cents at $58.05 per barrel
New York Dow: DOWN 1.2 percent at 26,164.04 (close)
London FTSE 100: DOWN 0.8 percent at 7,143.15 (close)
Source: Bangladesh Sangbad Sangstha (BSS)