Stocks in Asia were mixed during Tuesday morning trade amid renewed tensions between the U.S. and China after Washington said tariffs on Chinese goods will rise on Friday.
The Chinese markets, which plunged more than 5% on Monday, attempted to stage a recovery in Tuesday morning trade. The Shanghai composite rose 0.64% and the Shenzhen component added more than 1%, while the Shenzhen composite advanced 1.45%.
Meanwhile, Hong Kong’s Hang Seng index also added 0.70%.
The Nikkei 225 in Japan, which returned to the first day of trade following an extended holiday period, slipped 0.97% in morning trade as shares of index heavyweight Fanuc dropped more than 2%. The Topix index also declined 0.66%.
Over in South Korea, where markets were closed on Monday, the Kospi fell 1% as shares of Hyundai Motor dropped more than 1%.
Australia’s ASX 200, on the other hand, rose 0.8%.
“I think what’s quite surprising here is just that people are surprised by what’s happened over the last few days,” Alexander Treves, managing director and investment specialist of emerging markets and Asia Pacific equities at J.P. Morgan Asset Management, told CNBC’s “Squawk Box” on Tuesday.
“Given the various people involved, surely an element of disruption was always going to be likely along the way through this process,” Treves said. “Our best guess at the moment is that this is a negotiating ploy.”
Asia-Pacific Market Indexes Chart
In overnight market action stateside, stocks recovered from most of their losses amid hopes that China and the U.S. will still strike a trade deal despite a recent re-escalation in tensions.
The Dow Jones Industrial Average ended the day down just 66.47 points at 26,438.48, while the S&P 500 closed 0.4% lower at 2,932.47. The Nasdaq Composite was down 0.5% at 8,123.29.
Shares on Wall Street made a stunning comeback from their intraday lows — with the Dow plunging as much as 471 points at one point — after CNBC reported that a Chinese delegation will still travel to the U.S. to continue negotiations this week, albeit with a smaller group than originally planned. Chinese Vice Premier Liu is also expected to join the delegation in Washington.
Stocks across the globe were caught in a whirlwind on Monday after U.S. President Donald Trump said in a Sunday tweet that current 10% tariffs on $200 billion worth Chinese goods were set to increase to 25% on Friday. Trump also threatened to impose 25% of tariffs on an additional $325 billion of Chinese goods “shortly.”
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.503 after touching levels above 97.6 yesterday.
The Japanese yen, widely viewed as a safe-haven currency, traded at 110.64 against the dollar after touching highs below 110.5 in the previous trading session. The Australian dollar changed hands at $0.6996 after a turbulent session yesterday which saw the currency swing between the $0.696 and $0.700 levels.
Oil prices were mixed in the morning of Asian trading hours, with the international benchmark Brent crude futures contract slipping 0.1% to $71.17 per barrel. U.S. crude futures rose fractionally to $62.29 per barrel.
— CNBC’s Fred Imbert and Thomas Franck contributed to this report.
