Asian Shares Dip as Trade Tensions with China Worsen
Asian Shares Drop as Trade Tensions with China Worsen
Tokyo (AP) – Asian shares took a hit on Thursday, with Tokyo’s benchmark falling over 2% as concerns over escalating trade tensions with China overshadowed Wall Street’s recent record-breaking rally.
By early afternoon, Japan’s Nikkei 225 index was down 1.9% at 40,324.17, with tech-related shares leading the decline. Chip companies like ASML from the Netherlands and Tokyo Electron from Japan faced scrutiny after reports suggested President Joe Biden is considering severe trade restrictions on companies supplying advanced semiconductor technology to China.
The U.S. government has already blocked Chinese access to advanced chips and equipment, citing security concerns, and is urging allies to follow suit. This has put pressure on chip equipment makers like Tokyo Electron and Advantest, whose shares plunged 9.4% and 4.6%, respectively.
The strengthening yen also added to worries for Japanese exporters, with concerns over the impact on companies like Toyota Motor Corp. The recent currency fluctuations have been attributed to U.S. politics taking center stage, with former President Donald Trump expressing concerns about the strength of the dollar.
Elsewhere in Asia, Hong Kong was the only market to gain, while Taiwan’s Taiex and South Korea’s Kospi saw declines. Investors are closely watching for policies to boost China’s slowing economy as a top-level meeting of the ruling Communist Party concludes in Beijing.
In the U.S., tech heavyweights like Nvidia and Advanced Micro Devices saw significant losses, dragging down the Nasdaq composite by 2.8%, its worst drop since 2022. The S&P 500 also fell 1.4%, while the Dow Jones Industrial Average managed to climb.
The recent market movements reflect a shift towards broader market participation, with smaller stocks in the Russell 2000 index seeing gains. However, concerns over interest rates and the U.S. economy persist, leading to volatility in the markets.
In energy trading, benchmark U.S. crude and Brent crude both saw gains early Thursday.
Overall, the market outlook remains uncertain as trade tensions and economic concerns continue to weigh on investor sentiment. Stay tuned for further updates on this developing story.