Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Asian shares fell and copper prices eased on Tuesday after Washington announced new tariffs on Chinese imports, inflaming trade tensions between the world’s two biggest economies.
US stock futures took a knock as well, with E-Minis for the S&P 500 ESc1 and the Dow Minis 1YMc1 both down 0.2 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.3 per cent with Hong Kong's Hang Seng index .HSI off 0.7 per cent and Australian stocks down 0.4 per cent.
Chinese shares were a touch lower with the blue-chip index .CSI300 off 0.1 per cent while Japan's Nikkei .N225 bucked the trend, gaining more than 1.5 per cent.
The sell-off came after US President Donald Trump imposed 10 per cent tariffs on additional $200 billion worth of Chinese imports, and warned of duties on more products if China took retaliatory action.
Trump spared smart watches from Apple (AAPL.O) and Fitbit (FIT.N) and other consumer products such as bicycle helmets and car seats for babies.
“The announcement dashes hopes of any trade negotiations between two rivals. Be prepared for a prolonged period of risk-off,” analysts at ING said in a note.
“Although the levy saw a lower rate, it could foment a response from China which had previously threatened to walk away from the negotiating table,” ING said.
Some analysts said the market reaction was a bit muted because Tuesday’s announcement was in line with expectations and had been baked into prices.
Chinese Vice Premier Liu He was to convene a meeting in Beijing on Tuesday to discuss the government’s response, Bloomberg News reported, citing a person briefed on the matter.
The South China Morning Post newspaper reported, citing an unidentified source in Beijing, that China was reviewing its previous plan to send a delegation headed by Liu He to the United States next week for fresh talks, and was now unlikely to do so.
In currencies, the dollar index gained briefly against a basket of major currencies but was last unchanged at 94.465. .DXY
Against the yen JPY=, the greenback inched up 0.1 per cent to 111.94.
The risk-sensitive Australian dollar AUD=D3 shed as much as 0.5 per cent on the tariff news to near a recent 2-1/2 year low, then it changed direction and was up 0.2 per cent at $0.7193.
The euro EUR= gained a fraction to $1.1693.
The latest tariff news sent some investors to the safety of US Treasuries with 10-year US10YT=RR yields coming off Monday’s four-month top of 3.0220 per cent as bond prices rose. They were last at 2.9922 per cent.
Oil prices fell on worries rising trade tensions could dent global demand for crude.
US crude futures CLc1 skidded 28 cents to $68.63 a barrel while international benchmark Brent futures LCOc1 lost 43 cents to $77.62 per barrel, Reuters reported.
Copper, considered a barometer of global growth, drifted lower for a third straight session.