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GLOBAL MARKETS-Asian stocks bruised by Trump's trade war threats

Published 2018-08-30, 09:02 p/m
© Reuters. GLOBAL MARKETS-Asian stocks bruised by Trump's trade war threats
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* Global stocks fall as Trump threatens new tariffs

* Argentina's peso in freefall despite surprise rate hike

By Hideyuki Sano

TOKYO, Aug 31 (Reuters) - Asian shares came under renewed pressure on Friday after reports U.S. President Donald Trump was preparing to step up a trade war with Beijing and ready to impose more tariffs on Chinese imports.

Many emerging market currencies were also frail after Argentina's peso sank on Thursday despite the central bank's interest rate hike. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.2 percent in early trade while Japan's Nikkei .N225 dropped 0.8 percent.

U.S. S&P500 e-mini futures ESc1 fell 0.17 percent. On Thursday, the S&P 500 .SPX lost 0.44 percent from Wednesday's record close of 2,914.

Pouring cold water on the rally in global shares, which started in the middle of the month, were hostile comments from Trump on trade.

Bloomberg reported that Trump said he was ready to impose more tariffs on $200 billion worth of goods from China as soon as the public comment period on the plan ends next week. far, Trump has carried out what he said he would do," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank. "Even though there are some doubts the U.S. trade representative could come up with new tariffs so quickly, I suspect worries about a trade war will start to eclipse optimism based on strong U.S. economic data."

Trump also threatened in an interview with Bloomberg on Thursday to withdraw from the World Trade Organization if "they don't shape up" -- a move that would further undermine one of the foundations of the modern global trading system. addition, he said the European Union's proposal to eliminate auto tariffs is not good enough and called its trade policies "almost as bad as China." cautious mood helped lift the yen, which rose 0.6 percent on Thursday, its biggest daily rise in about six weeks. In early Friday trade, it changed hands at 111.04 per dollar JPY= .

The euro traded flat at $1.1665 EUR= , having shed 0.33 percent in the previous session.

The common currency has recovered from a 13-1/2-month low of $1.1301 hit in mid-August but looks set to end the month little changed from end-July.

Emerging market currencies had less luck.

The peso ARS=RASL , the world's worst-performing currency this year due to the country's poor economic health, fell 10 percent on the day, bringing its month-to-date losses to 27 percent.

Argentina's central bank at an emergency meeting on Thursday voted unanimously to raise its benchmark rate to 60 percent from 45 percent, however, the unexpected move failed to stabilise the peso.

That knocked down the Brazilian real BRL= to near its record low touched in September 2015. It is down almost 10 percent this month.

The Turkish lira, which has been hit by concerns over President Tayyip Erdogan's interference in monetary policy and his diplomatic spats with Washington, also slipped towards record low marked about two weeks ago.

The lira TRYTOM=D3 stood at 6.740 per dollar in early Friday trade, having fallen 11 percent so far this week.

Oil prices slipped slightly after hitting their highest levels in more than a month the previous day on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. inventories.

Brent crude oil LCOc1 dropped 0.3 percent to $77.51 a barrel from Thursday's settlement at $77.77. U.S. crude CLc1 stood down 0.3 percent at $70.04 a barrel.

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http://reut.rs/2sSBRiD

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