Asian markets were set to trade lower on Monday, following a global sell-off late last week amid fears that rising tensions between the United States and China could lead to a full-blown trade war.
In Australia, the benchmark ASX 200 opened lower, trading down 0.75 percent at 5,777.1 in early trade. The heavily weighted financial sector was down 0.97 percent.
Some of the major banking stocks in the country were notably lower — shares of ANZ fell 1.19 percent, Commonwealth Bank was down 1.5 percent and the National Australia Bank declined 1.31 percent. Westpac shares were down 0.7 percent.
Nikkei futures in Chicago traded at 20,225, while Osaka futures were at 20,140. The Japanese benchmark index last closed at 20,617.86.
Beijing on Friday said it may target 128 U.S. products with an import value of $3 billion in response to President Donald Trump‘s executive order earlier this month that imposed broad duties on foreign aluminum and steel imports.
Trump had also announced tariff plans for up to $60 billion in Chinese imports, although China did not officially connect its Friday threats of retaliation to that White House action.
On Saturday, some of the world’s top economists and business leaders at the China Development Forum in Beijing warned about the risks of a trade war between the two economic powerhouses. Nobel-prize winning economists Robert Shiller and Joseph Stiglitzpredicted pain ahead for the U.S. economy if Beijing and Washington ramp up tit-for-tat trade penalties.
One market commentator said there was “clearly a fair amount of damage done” from the week’s developments, after markets sold off in Asia, Europe and the United States.
“Whether this is the sole cause of latest risk market ructions is debatable,” Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, wrote in a morning note. He added that others were suggesting that confidence in continued strong synchronized global growth may be slipping, following disappointing economic data.
He added that “rising geopolitical tension” should also be noted, following the tapping of John Bolton to be Trump’s new national security advisor.
“This has heightened concerns that Trump will formally repudiate the 2015 nuclear deal with Iran that Bolton is on record as saying was a mistake,” Attrill said.
In the currency market, the dollar index traded at 89.444, falling from levels above 90.3 in the previous week.
Among currency majors, the Japanese yen traded at 104.73 to the dollar. The Australian dollar fetched $0.7707.
