SINGAPORE — Asian shares were mostly lower Monday on reports that President Donald Trump will soon place tariffs on $200 billion more of Chinese goods, even as officials worked to iron out tensions between the world’s two largest economies.
KEEPING SCORE: South Korea’s Kospi fell 0.8 per cent to 2,300.83 on Monday. Hong Kong’s Hang Seng index tumbled 1.9 per cent to 26,768.17. The Shanghai Composite index lost 1.0 per cent to 2,654.13. But Australia’s S&P/ASX 200 rose 0.3 per cent to 6,183.30. Japanese markets were closed for a national holiday. Stocks fell in Taiwan and Southeast Asia.
WALL STREET: On Friday, smaller U.S. companies posted gains on signs of sustained economic growth, while the rest barely moved. The S&P 500 index was almost flat at 2,904.98. The Dow Jones Industrial Average was less than 0.1 per cent higher at 26,154.67. The Nasdaq composite gave up under 0.1 per cent to 8,010.04. The Russell 2000 index of smaller-company stocks, which is less vulnerable to flare-ups in trade tensions, added 0.4 per cent to 1,721.72.
US-CHINA TRADE: On Saturday, The Wall Street Journal reported that Trump was going ahead with plans to impose new tariffs on about $200 billion of Chinese imports. It cited unnamed people familiar with the matter who said the tariff level will likely be set at about 10 per cent, below the 25 per cent announced earlier this year. At the same time, U.S. officials, led by Treasury Secretary Steven Mnuchin, are preparing to hold new talks on the tariff dispute with Beijing. Envoys from the two countries last met on Aug. 22 in Washington but reported no progress. The two governments have already imposed 25 per cent tariffs on $50 billion of each other’s goods. Beijing has issued a list of another $60 billion of American products for retaliation if Trump’s next tariff hike goes ahead.
ANALYST’S TAKE: “Trade issues and their impact on the global economy are likely to dominate investor focus this week,” Stephen Innes of OANDA said in a commentary. “This good cop-bad cop routine continues to undermine Mr. Mnuchin’s efforts as it’s still not clear if anyone other the Trump himself is commissioned to cut a deal. And not too unexpectedly and quite ominously China could cancel the meeting,” he added.
ENERGY: Benchmark U.S. crude dropped 3 cents to $68.96 a barrel on Monday. The contract added 0.6 per cent to settle at $68.99 a barrel in New York. Brent crude, used to price international oils, gained 1 cent to $78.10 a barrel. It shed 0.1 per cent to $78.09 a barrel in London.
CURRENCIES: The dollar eased to 111.99 yen from 112.03 yen. The euro rose to $1.1635 from $1.1632.