eBusiness Weekly
TOKYO – Asian stocks slid on Friday as reports of more chaos in the Trump administration tested investors’ nerves, already frayed by fears that U.S. tariffs could hurt the global economy and trigger a trade war.
European stock futures point to a weaker start in Europe, with futures of Britain’s FTSE and France’s Cac down 0.1 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent in early trade. Japan’s Nikkei was down 0.6 percent.
On Wall Street, the S&P 500 edged 0.08 percent lower on Thursday, marking its first four-day losing streak of 2018. The Nasdaq Composite dropped 0.2 percent.
U.S. shares hit a session low soon after the New York Times reported that U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to U.S. President Donald Trump’s businesses.
The Washington Post, meanwhile, reported that President Donald Trump has decided to remove H.R. McMaster as his national security advisor.
The news came just days after following the recent departure of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration.
The developments, together with the report earlier this week that Trump is seeking to impose tariffs on up to $60 billion of Chinese imports, cemented investor concerns that the administration is increasingly leaning toward protectionism.
White House trade adviser Peter Navarro has said that Trump would in coming weeks get options to address China’s “theft and forced transfer” of American intellectual property as part of the investigation under Section 301.
“The key here is whether the main battle ground of the trade war will reach IT digital products. In this sector, there is division of labor in the supply chain, with each country having specialized products,” said Hiroshi Watanabe, economist at Sony Financial Holding.
“Investors have been thinking the U.S. would not take such steps as that would harm itself. But the fall in high-tech shares yesterday may suggest that investors have begun to take such risks into account,” he added.
Fears that the tariffs could disrupt synchronized global growth dwarfed recent strong economic data, including a fall in U.S. jobless claims.
Any disruptions to the information sector will cost investors particularly dearly given the sector has been the main engine of the global share rally during the past decade.
“It seems as if for Trump, only ‘America First’ policies are left to boost his popularity and to get re-elected,” said Hiroko Iwaki, senior strategist at Mizuho Securities.
“It is hard to expect political uncertainties to disappear soon. That will underpin bonds,” she added… – Reuters
