Asian markets hit by trade worries, Brexit woes sink pound

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

country.

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

News.

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

deadline.

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

commodity.

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)