Asian stock markets plunged in early trading Monday as trade negotiations between the U.S. and China appeared to be on the verge of collapse.
Early Sunday, President Donald Trump tweeted that he would raise tariffs on $200 billion of Chinese goods to 25% this week, apparently taking Chinese officials by surprise. In response, China may withdraw from the next round of trade talks scheduled to begin Wednesday in Washington. U.S. officials had indicated progress had been made at talks last week in Beijing, and said it was possible a deal could be reached by the end of this week.
But the sudden hard line by Trump spooked investors. U.S. stock market futures sank, with Dow Jones Industrial Average futures YMM9, -1.89% , S&P 500 futures ESM9, -1.86% and Nasdaq Composite futures NQM9, -2.22% all falling around 2% by Sunday night.
Hong Kong’s Hang Seng Index HSI, -2.91% dropped 2.5% immediately after trading began Monday morning. The Shanghai Composite SHCOMP, -3.07% fell 3.2% and the smaller-cap Shenzhen Composite 399106, -3.24% plunged about 4%. Australia’s S&P/ASX 200 XJO, -0.92% was down 1.3%, and benchmark indexes in Taiwan Y9999, -0.69% and Singapore STI, -2.99% declined as well. Japan’s Nikkei and South Korea’s Kospi were closed for holidays.
Losses were spread across all sectors in Hong Kong, with Geely Automotive 0175, -7.77% , food processor WH Group 0288, -7.62% and Apple supplier AAC Technologies 2018, -6.51% among the biggest decliners. CSPC Pharmaceutical 1093, -5.78% and China Life Insurance 2628, -6.05% also sank. Apple manufacturer Foxconn 2354, -3.14% and Taiwan Semiconductor 2330, -2.45% dropped in Taiwan. In Australia, Beach Energy BPT, -2.48% and Westpac Banking WBC, -1.60% fell.
After posting a second straight losing week Friday, crude oil prices continued to fall Monday. U.S.-based West Texas Intermediate crude for June delivery CLM9, -2.50% was down more than 2% and global benchmark July Brent crude LCON9, -2.27% fell by almost as much.
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