Asia Markets: Hong Kong stocks under pressure as trade jitters resurface; holidays keep rest of Asia quiet

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Hong Kong stocks tumbled on Monday, as trade tensions returned at the start of the week for Asia, which was dulled by the closure of several markets for holidays.

Last week marked a strong one for Asia, with the Shanghai Composite SHCOMP, +2.50%  logging its best week in over two years, in a rally that extended across global markets. Those gains were led by the U.S. amid optimism over the economy and a calmer view of the trade situation.

But some of that upbeat momentum faded Monday as U.S. tariffs on $200 billion in Chinese goods officially kicked in, and China reportedly canceled trade talks that had been planned for the coming days. Beijing has also retaliated with levies on $60 billion in U.S. goods. And any reaction to trade headlines from the Shanghai Composite would have to wait as China, Japan, South Korea and Taiwan markets were all closed for holidays.

Hong Kong’s Hang Seng Index HSI, -1.62%  closed down 1.6%, with financial and real-estate companies bearing the brunt of losses. Also pressuring markets, the Hong Kong Interbank Offered Rate — short-term rates that Hong Kong banks charge each other — hit the highest level in around a decade on Monday. That move came after the Hong Kong dollar surged 0.4% on Friday, its largest jump since 2003.

Among stocks under pressure, China Resources Land Ltd. 1109, -5.25%  tumbled nearly 5% and China Life Insurance Co. Ltd. 0836, -2.82%  fell over 2%.

Elsewhere, Australia’s ASX 200 XJO, -0.12% closed down 0.1%, with a drop of 1.6% for Newcrest Mining Ltd. NCM, -1.57% There were some bright spots as oil companies benefited from a gain of around 2% in Brent LCOX8, +2.21%  and WTI crude prices CLX8, +1.64%  after a meeting of major oil producers essentially maintained the status quo on global production.

See also: Oil producers say they can ramp up output as needed to meet any shortages in global oil market

New Zealand’s NZX 50 NZ50GR, -0.41% closed down 0.4%.

In the U.S., stocks were setting up for a weaker session, with Dow futures YMZ8, -0.15%  off 30 points and S&P 500 futures ESZ8, -0.17%  fell 3.7 points. Some investors worry that Wall Street is ignoring the potential for a simmering trade conflict after the Dow Jones Industrial Average marked its first record since Jan. 26.

— Barbara Kollmeyer contributed to this report

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