Asian stocks are sea of red as US-China trade tensions escalate
- Trump's sudden hard line on China tariffs seems to have spooked investors.
- Asian equities are feelign the pull of gravity with the Shannghai Composite reporting a 5% drop on the day.
Asian stocks nonsedived in early trading Monday, courest of re-escalation in US-Chian trade tensions.
President Donald Trump tweeted eraly Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25% from the current 10%, pouring cold water over the optimism generated by both Washington and Beijing's repeated assurances in recent weeks that negoatiatons are closing on a trade deal.
Trump's sudden tough talk caught investors offguard, leadign to risk aversion. The futures on the Dow Jones Industrial Average are currently down more than 500 points and the S&P 500 futures have shed 57 points.
Hong Kong's Hang Seng index fell 3.7% in early trade and is currently flashing a 3.2% drop on the day. Stocks in China are flashing red with the Shanghai Composite down more than 5%. Other regional heavyweights like Japan's Nikkei and Australia's S&P/ASX 200 are also rerporting losses at press time.
In FX markets, the anti-risk Japanese Yen is solidy bid against most majors. In commodities space, oil bechmarks are down about 2% each, having posting a second straight losing week Friday.
Investors may continue to sell risk in Europe on renewed fears of a full-blown US-Chinan trade war. As per latest reports, China has cancelled Vice Premier Lui He's trip to Wahington for trade talks.
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
