By Canadian Press

Asian stocks fall on US-China trade tensions, yen rises

Apr 2, 2018 | 10:00 AM

BEIJING — Asian stocks fell for a second day Tuesday amid jitters about U.S.-Chinese trade tensions and mounting public scrutiny of technology companies.

Markets in China, Japan, Australia and South Korea all declined while the Japanese yen rose against the dollar as currency traders looked for a safe haven.

The Shanghai Composite Index lost 1.1 per cent to 3,129.55 points and Tokyo’s Nikkei 225 dropped 0.9 per cent to 21,199.98. Hong Kong’s Hang Seng lost 0.9 per cent to 29,828.46.

Investors worry China’s decision to raise tariffs on $3 billion of U.S. goods including pork, apples and steel pipe raises the risk of a broader conflict that might depress global trade.

The amount of goods affected is a small share of China’s $150 billion in annual imports of U.S. goods. But investors see a bigger fight looming over U.S. President Donald Trump’s approval of possible higher duties on $50 billion of Chinese goods in response to complaints Beijing steals or pressures foreign companies to hand over technology.

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“The risk of a downward spiral to tit-for-tat trade measures has appreciably increased,” said Weiliang Chang of Mizuho Bank in a report.

China’s foreign minister tried to reassure companies and investors that Beijing, the No. 1 trading partner for all of its Asian neighbours, wasn’t closing its markets.

“Despite the rise of protectionism in the world, China will remain committed to openness (and) will open wider to the rest of the world,” said Wang Yi at a news conference.

Elsewhere in the region, Sydney’s S&P-ASX 200 shed 0.1 per cent to 5,752.70. Seoul’s Kospi retreated 0.6 per cent to 2,429.18. Benchmarks in Taiwan and Southeast Asia also declined.

The dollar edged down to 105.87 yen from Monday’s 105.89 yen as currency traders shifted money into the Japanese currency, seen as a haven in times of market turmoil.

Benchmark U.S. crude gained 15 cents to $63.16 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.93 on Monday to close at $63.01.

Brent crude, used to price international oils, rose 16 cents to $67.80 in London. It tumbled $1.70 to $67.64 on Monday.

On Wall Street, stocks sank as worry about trade tensions compounded by heightened public scrutiny of tech companies in the United States and Europe.

That deflated some previously high-fliers including Amazon, Microsoft and Facebook.

The Dow Jones industrial average fell 1.9 per cent to 23,644.19. The Standard & Poor’s 500 index gave up 2.2 per cent, to 2,581.88. The Nasdaq composite slumped 2.7 per cent to 6,870.12.

Amazon fell 5.2 per cent following broadsides from Trump on Twitter. Facebook tumbled as a widening privacy scandal weighed on its stock.

The threat of tighter regulation in Europe and the United States prompted investors to pull money out of Netflix, Microsoft and Google parent Alphabet.

Joe McDonald, The Associated Press