TOKYO (Reuters) - Asian stocks tumbled on Thursday as the latest escalation in the Sino-U.S. trade war hit Chinese shares, while global bond markets were rattled by increased borrowing by Washington and Japan’s new tolerance for higher yields.
FILE PHOTO: An employee of the Tokyo Stock Exchange (TSE) works at the bourse in Tokyo, Japan, February 6, 2018. REUTERS/Toru Hanai/File Photo
European shares are expected to fall, with financial spread-betters see Britain’s FTSE, France’s CAC, Germany’s DAX opening 0.4 percent lower.
Japan’s Nikkei declined 1.1 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.5 percent, dragged down by a 2.2 percent fall in Chinese H-shares.
The CSI 300 index of China’s A-shares dropped 3.0 percent to 2,741, near its 1 1/2-year low of 2,691 set on July 6. Shares of export-dependent electronics firms fell 4.1 percent.
Hong Kong’s Hang Seng Index fell 2.5 percent to 10-month lows while an index of Chinese start-up firms sank 3.5 percent to its lowest level since January 2015.
“Market sentiment was dampened by renewed trade war fears,” said Zhang Quan, an analyst at Huaan Securities. “But investors need not be overly pessimistic as China is taking steps to hedge the risks from trade frictions with the United States, including monetary and fiscal policy easing.”
The U.S. administration on Wednesday increased pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.
“If it had not been for the sideswipe on trade, markets would have been in much better shape this week. Apple’s earnings were super, helping to quell concerns about high-tech companies,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
“The BOJ’s policy tweaks weren’t much of a tightening, and did little
