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Asian Markets Fall on Political Tensions

asian, china, japan

The Asian and Pacific Rim equity markets were broadly lower by the afternoon during Friday’s Asian trade session.

Regional traders are worried over simmering political tension between the United States and China which could delay a preliminary trade accord ending a better than 16 month long bitter trade war.

In Hong Kong, the Hang Seng index led the region lower. Shares shed 1.97 percent by lunchtime.

In China, on the mainland, the Shanghai composite was down 0.64 percent. The smaller Shenzhen composite fell over 0.72 percent and the Shenzhen component was trading down by 0.85 percent by noon.

In Japan, the headline Nikkei 225 was down nearly 0.2 percent. In Tokyo, the broader Topix index was down over 0.2 percent.

Across the Korean Strait, the South Korean Kospi composite index was down 1.35 percent. Shares of Samsung electronics dipped nearly two percent.

Earlier in the day, the Bank of Korea announced monetary policy. The Korean central bank kept its benchmark rate steady at 1.25 percent. This was expected by market participants. This is their last monetary policy meeting for the year.

Elsewhere in the Asian and Pacific Rim, the Australian S&P ASX 200 reversed early gains to trade flat on the day

Asian Traders Monitor Trade and Political Tensions between the U.S. and China

Political tensions between China and the United States are escalating. This comes after the U.S. passed provocative legislation before their Thanksgiving Day holiday.

On Thursday, China warned the United States that they would take “firm countermeasures” in response to new U.S. legislation supporting pro-democracy protestors in Hong Kong.

Market traders are worried that this could delay the two counties in signing a “phase one” trade accord. This trade war has wreaked havoc on global financial markets and stunted global economic growth. A trade accord would go a long way with restoring overall market sentiment.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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