Asian markets traded lower in early Tuesday trade after an overnight rally on Wall Street lost steam.
In Japan, the Nikkei 225 edged down by 0.59 percent and the Topix slipped 0.44 percent, with weakness coming through from financials, retailers and semiconductor-linked names. Major automakers also came under slight pressure.
South Korea’s Kospi index, meanwhile, lost 0.68 percent as technology stocks broadly declined.
Shipmakers also struggled following news that STX Offshore & Shipbuilding, which is not listed, would be filing for bankruptcy. Daewoo Shipbuilding & Marine Engineering was lower by 4.04 percent.
Down Under, the S&P/ASX 200 was off by 0.22 percent as the heavily weighted financials sector slipped 0.54 percent, weighing on the index.
Markets in the region had mostly advanced on Monday as trade fears faded slightly in the last session, although Japan’s Nikkei 225 and China’s Shanghai composite still finished in correction territory.
Trade tensions between the world’s two largest economies have been in focus in recent weeks, with investors on edge over the possibility of a trade war happening.
Chinese President Xi Jinping’s scheduled speech at the Boao Forum for Asia later in the day will be closely watched for Beijing’s response to the recent escalation in U.S.-China trade tensions. Investors will also be on the lookout for potential announcements on market reforms.
“Expectations are reasonably high that China’s president will reaffirm Beijing’s ongoing commitment to reform and more open markets (while not being seen to overtly acquiesce to Washington’s demands,)” said ANZ analysts in a note.
Xi’s speech will come on the back of President Donald Trump’s announcement on Friday that he had instructed U.S. trade officials to consider an additional $100 billion in tariffs on Chinese imports. That followed China’s Wednesday announcement that it would introduce extra tariffs on 106 U.S. products, including soybeans, although no start date was given.
Trump said in a tweet on Sunday that he expected China would remove its trade barriers, adding that the U.S. and China had a “[g]reat future” ahead. On Monday, however, the president criticized China in a separate tweet for what he called “STUPID TRADE.”
U.S. stock indexes rose on Monday, but finished the day well off session highs following a report that FBI officers had raided the office of Michael Cohen, Trump’s longtime personal lawyer.
Stocks had rallied earlier in the session after recent U.S.-China trade tensions appeared to ease following a week largely dominated by trade-related developments.
Against the yen, the dollar slipped to trade at 106.70 by 8:02 a.m. HK/SIN after trading above the 107 handle during Asia afternoon trade on Monday. Meanwhile, the dollar index was a touch softer at 89.825.
Here’s the economic calendar for Tuesday (all times in HK/SIN):
- 9:30 a.m.: Australia NAB business confidence survey
- 2:00 p.m.: Japan machine tool orders
- 3:00 p.m.: China M2 money supply
Disclosure: Larry Kudlow is a former CNBC contributor.
