US stocks tumble after Trump tariff threat against China

US stocks slumped on Thursday after President Donald Trump announced he planned to impose tariffs on up to 60 billion US dollars of Chinese imports.

The market was rattled by fears about the impact on the global economy, fueling the biggest percentage declines in Wall Street’s three major indexes since they entered correction territory six weeks ago.

The Dow Jones Industrial Average fell 724.42 points, or 2.93 percent, to 23,957.89; the S&P 500 lost 68.24 points, or 2.52 percent, to 2,643.69; and the Nasdaq Composite dropped 178.61 points, or 2.43 percent, to 7,166.68.

The losses marked the biggest daily percentage drop for each of the major indexes since Feb. 8, when the Dow and S&P confirmed a market correction from their Jan. 26 highs.

Selling was broad, with only the defensive utilities 0.44 on the plus side, up 0.44 percent, out of 11 major S&P sectors.

Specialist trader Meric Greenbaum works at his post on the floor of the New York Stock Exchange, March 22, 2018.

Major industrials slumped. Planemaker Boeing Co lost 5.2 percent, Caterpillar Inc. dropped 5.7 and 3M Co lost 4.7. The three were among the biggest drags on the Dow Jones Industrial Average. The S&P industrials sector plunged 3.28 percent.

The CBOE Volatility Index, the most widely followed barometer of expected near-term volatility in the S&P 500, finished up 5.48 points at 23.34, its highest close since Feb. 13.23.34

US treasury prices gained as investors sought out safe havens. Benchmark 10-year notes last rose 23/32 in price to yield 2.8244 percent, from 2.907 percent late on Wednesday.

The drop in yields weighed on financial stocks, which were down 3.70 percent, making them the worst performing of the major sectors.

Australian stocks lost 1.65 percent and Japan's Nikkei. N225 dropped 1.9 percent. South Korea's KOSPI .KS11 retreated 2 percent.

Hong Kong, China stocks dive at open

Hong Kong and Chinese mainland stocks also plunged at market opening on Friday on growing fears of a global trade war.

The Hang Seng Index plunged 3.67 percent, or 1,140.82 points, to 29,930.23, while the benchmark Shanghai Composite Index fell 2.78 percent, or 90.71 points, to 3,172.77 and the Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 3.09 percent, or 57.22 points, to 1,792.38.

Shares of Tencent Holdings Ltd were set to open down 7.83 percent on Friday after Naspers Ltd’s plan to cut its stake in the Chinese Internet giant in a deal that could net the South African media and e-commerce group up to 11 billion US dollars.

The stocks were set to open at HK$405, the lowest opening price since Feb. 9. That compared with a 3.67 percent fall in the benchmark index.

Naspers plans to sell up to 190 million shares, or 2 percent, in Tencent and said it has no plans to reduce its holding further for the next three years.

US-listed Chinese firms tumble amid trade concerns

Baidu's company logo is seen at its headquarters in Beijing, Dec. 17, 2014.

US-listed Chinese companies traded sharply lower on Thursday, with all the top 10 stocks by weight in the S&P US Listed China 50 index witnessing big losses.

Shares of BeiGene, Ltd, Sina and Baidu slumped 7.25 percent, 6.78 percent and 5.57 percent respectively, leading the decreases in the top 10 stocks of the index.

Shares of Alibaba and shares of JD.com, another two famous Chinese tech companies listed in the US equity market, dropped 5.45 percent and 2.30 percent respectively on Thursday.

Analysts said Trump's protectionist moves made investors nervous and history had shown that such trade policies could harm the economy.

As of Wednesday, the S&P US Listed China 50 index stood at 3,349.26, marking a 3.09-percent gain for the month-to-date returns and an 8.35-percent increase for the year-to-date returns.

Dollar drops to 104 yen zone in Tokyo

The US dollar changed hands in the upper 104 yen zone in early deals in Tokyo on Friday, hitting its lowest level since November 2016, as US trade policy may lead to retaliation from other countries.

As markets opened, the dollar fetched 104.97-98 yen compared with 105.23-33 yen in New York and 105.68-70 yen in Tokyo at 5 p.m. on Thursday.

The euro was quoted at 1.2325-2325 dollars and 129.36-37 yen against 1.2295-2305 dollars and 129.45-55 yen in New York and 1.2373-2375 dollars and 130.76-80 yen late on Thursday afternoon trade in Tokyo.

Japan's Finance Minister Taro Aso.

Japan's closely watching US tariff moves

Japanese Finance Minister Taro Aso said on Friday that he would closely watch the United States’ move to impose the tariffs on Chinese goods.

The threatened tariffs and possible investment restrictions on China stem from the US Trade Representative’s investigation of alleged misappropriation of US intellectual property by Chinese companies.

“Japan, as well as the United States, understands the importance of strengthening and effectively enforcing protection of intellectual property,” Aso told reporters after a cabinet meeting, adding that he needed to examine the US memorandum in detail.

Aso made no comment on market reaction to the US announcement.

(AFP & REUTERS & ASIA PACIFIC DAILY)