Asian shares at four-month low on deepening U.S.-China trade war
By Tomo Uetake Tokyo (Reuters) - Asian shares hobbled near four-month lows on Friday and crude oil plunged on worries the U.S.-China trade spat was developing into a more entrenched strategic dispute between the world's two largest economies, pushing investors to safe-haven assets. MSCI's broadest index of Asia-Pacific shares outside Japan stood flat, hovering near its fresh four-month low marked on Thursday, and was on track for a third straight weekly loss, down 0.9% so far on the week. Japan's Nikkei average dropped 0.6%.
By Tomo Uetake
Tokyo (Reuters) - Asian shares hobbled near four-month lows on Friday and crude oil plunged on worries the U.S.-China trade spat was developing into a more entrenched strategic dispute between the world's two largest economies, pushing investors to safe-haven assets.
MSCI's broadest index of Asia-Pacific shares outside Japan stood flat, hovering near its fresh four-month low marked on Thursday, and was on track for a third straight weekly loss, down 0.9% so far on the week.
Japan's Nikkei average dropped 0.6%.
On Wall Street, the Dow Jones Industrial Average fell 1.1%, the S&P 500 lost 1.2% and the Nasdaq Composite dropped 1.6%, as traders dumped cyclical names on fears that the escalating U.S.-China trade war would stymie global economic growth.
U.S. President Donald Trump said on Thursday that Washington's complaints against Huawei Technologies might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant "very dangerous."
Washington last week effectively banned U.S. firms from doing business with Huawei, the world's largest telecoms network gear maker, citing national security concerns.
As flight-to-safety plays dominated the global markets, the benchmark 10-year U.S. Treasury note yield hit 2.292%, the lowest level since mid-October, 2017, with the key parts of the yield curve inverted.
Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities said big falls in U.S. manufacturing survey appear to reflect expectations of a breakdown in the U.S-China trade talks.
"In the last couple of years, the PMI has had a very small gap with hard data, such as industrial output. So if that holds true this time, we could see factory production plunging into negative levels (compared to a year ago)."
"Since the global financial crisis, U.S. output has fallen only once: from 2015 to early 2016 when the shale industry was badly hit. Markets could start to fret over a global slowdown as they have done late last year."
The greenback at one point hit its highest level in two years against a basket of six major currencies and the euro slumped to levels last seen in May 2017 as a recovery in euro zone business activity was weaker than expected.
The dollar hit a high of 98.371 against a basket of six major currencies overnight. The index was last quoted at 97.880, unchanged on the day. The euro fetched $1.1182.
Sterling weakened again on Thursday as pressure mounted on British Prime Minister Theresa May to name a date for her departure after backlash over her last-ditch plans for Britain's exit from the European Union.
It was last traded at $1.2662, little changed on the day. The pound suffered its 14th consecutive day of losses against the euro on Thursday, its longest losing streak on record. It stood at 0.8830 pound to the euro.
Other major currencies were relatively calm, with the safe-haven yen still supported but not aggressively so.
The dollar was holding at 109.68 yen, almost flat on the day.
In commodity markets, oil prices plunged on Thursday, with WTI crude losing nearly 6% as trade tensions dampened the demand outlook, putting the crude benchmarks on course for their biggest daily and weekly falls in six months.
In early Asian trade, U.S. crude rebounded 0.6% to $58.25 a barrel, after Thursday's 5.7% fall that too it to the lowest in two months. Brent crude futures also bounced back 0.4% to $68.05 per barrel, after falling 4.6% in the previous session.
(Additional reporting by Hideyuki Sano; Editing by Sam Holmes)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.