Fundamental Comment

Asian stocks slide on US-China tensions, stimulus uncertainty

Asian stocks slide on US-China tensions, stimulus uncertainty

Asian stocks were mostly lower on Friday amid elevating tensions between the United States and China, and on worries that the U.S. Congress may not reach consensus on a new fiscal stimulus before the end-of-the-week deadline.

In Hong Kong, the Hang Seng Index plunged 1.68 percent to 24,512.75, and the Shanghai Composite Index closed 0.96 percent down at 3,354.04.

Australia’s S&P/ASX 200 finished 0.62 percent down at 6,004.80, whilst South Korea’s Kospi index ascended 0.39 percent to 2,351.67.

In Japan, Nikkei 225 index slumped 0.39 percent to 22,329.94 points.

President Donald Trump has given an order effective after 45 days that any U.S. resident or company should not deal with either ByteDance, the Chinese owner of TikTok, and WeChat, the messaging platform owned by Tencent, and that any violation to his order would trigger firm penalties.  

“The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States,” Trump said.

Secretary of State Michael Pompeo urged on Thursday U.S. companies to eliminate the two famous applications from their stores.

Meanwhile, markets are expecting similar bans on U.S. companies in China in retaliation to Trump’s executive order.

Tencent Holdings ended 5.76 percent lower after plummeting 10 percent earlier during the session.

On the other hand, still there is high uncertainty whether the U.S. Congress would agree on the terms of the new fiscal stimulus that targets aiding Americans financially affected by the pandemic.

Later in the day, eyes will focus on the U.S. non-farm payrolls that may show a job-creation pace of 1.53 million in July, which will be much slower than June’s jobs of 4.8 million.

The dollar index managed to rebound today after hitting a bottom of 92.46 on Thursday, the lowest since May 2018, yet still set for its seventh straight weekly decline this week.

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