Asian Equities Extend Losses On Eve Of U.S. Tariff Deadline

Asian stocks fell for the fourth day and major currencies traded in tight ranges on Thursday, with financial markets jittery before a U.S. deadline to impose tariffs on Chinese imports just a day away.

Spread betters expected European stocks to open little changed, with Britain’s FTSE flat, Germany’s DAX 0.02 percent lower and France’s CAC down 0.1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan, which has been drifting lower since Monday, was down 0.5 percent. The index has lost about 2 percent this week, during which it plumbed a nine-month low.

S&P 500 futures edged up 0.1 percent while Dow futures lost 0.1 percent, pointing to a mixed start for Wall Street later in the day when trading resumes following Wednesday’s Independence Day holiday.

Japan’s Nikkei lost 1 percent, South Korea’s KOSPI slipped 0.75 percent, Hong Kong’s Hang Seng was off 0.9 percent and the Shanghai Composite Index fell 0.9 percent. “The markets lack strong direction without incentives from the United States, where their markets were closed yesterday. Moves by Chinese shares and the yuan remain a key factor in the meantime,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

The United States plans to implement tariffs on $50 billion worth of imports from China as both nations remained locked in a bitter trade dispute that has convulsed global financial markets in recent weeks. On July 6, tariffs on $34 billion worth of imports will take effect, and Beijing has promised to retaliate in kind.

However, China’s finance ministry did say on Wednesday that it will “absolutely not” fire the first shot in a trade war with the United States and will not be the first to levy tariffs.

China has put pressure on the European Union to issue a strong joint statement against U.S. President Donald Trump’s trade policies, European officials told Reuters.. “The $34 billion U.S. tariffs figure has been mostly factored by the markets and focus is now on what the United States says on the remaining $16 billion.”

 

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