Asian stock markets tumbled in early trading Tuesday, following Wall Street’s worst day of the year as trade tensions between the U.S. and China grew even worse.
sank 1.9%, while South Korea’s Kospi
fell 1% and Australia’s S&P/ASX 200
slid 2.4%. Hong Kong’s Hang Seng Index
tumbled 2.4% and the Shanghai Composite
fell 1.9%. Benchmark indexes in Taiwan
were all down about 1% or more.
Some indexes rose slightly from session lows after China’s central bank set the yuan’s reference point higher than expected early Tuesday, 7.0304 in onshore trading against the U.S. dollar and 7.0807 offshore.
Among individual stocks, SoftBank
fell in Tokyo trading, as did Toyota
and Fast Retailing
. In Hong Kong, Hang Lung Properties
, Sunny Optical
and Sands China
and SK Hynix
dropped in South Korea, while Beach Energy
and Westpac Banking
declined in Australia.
Late Monday, the U.S. Treasury Department labeled China a currency manipulator for the first time since 1994, opening the door to new sanctions and ratcheting up already high trade tensions. Earlier, China’s currency, the yuan
, broke a “line in the sand” below 7 U.S. dollars, apparently in retaliation for President Donald Trump’s announcement last week of new 10% tariffs against an additional $300 billion of Chinese goods, effective Sept. 1. China also confirmed it was suspending purchases of U.S. agricultural products.
In a note late Monday, Stephen Innes, managing partner of VM Markets, said of the Treasury Department’s declaration: “While a mostly symbolic gesture, it underscores rising trade tension and does also increase the likelihood of U.S. Treasury intervention which has traders preparing for worst-case scenarios: a protracted equity market sell-off, lower U.S. bond yields while provoking a stampede into safe havens. . . . How the yuan trades today will be critical for the market’s sentiment.”
Earlier, Wall Street suffered its worst day of 2019, with the Dow Jones Industrial Average shedding more than 767 points. The Dow
ended the day down 2.9%, at 25,717.74 , while the S&P
declined 87.31 points, or 3%, to close at 2,844.74. The Nasdaq Composite
shed 278.03 points to finish at 7,726.04, a decline of 3.5%.
U.S. stock futures fell as well late Monday, suggesting more steep losses when trading opens Tuesday. Dow Jones Industrial Average futures
were last down more than 300 points, or 1.2%.