TOKYO, March 13 — Stocks sank in Asia on Thursday, reversing initial gains, as worries about the economic impact of President Donald Trump’s trade policies overtook early optimism from a tepid reading of US inflation.
Gold climbed to within US$10 (RM44) of its record peak and the safe-haven yen rallied, while US Treasury yields turned lower. Crude oil prices also declined.
Hong Kong’s Hang Seng slumped 1.4 per cent as of 0545 GMT, and mainland Chinese blue chips slid 0.7 per cent.
Japan’s Nikkei gave up gains of as much as 1.4 per cent to last trade flat, while Taiwanese equities dropped 1.1 per cent and South Korea’s KOSPI lost 0.4 per cent.
Australia’s stocks benchmark closed down 0.5 per cent and is now 10 per cent off its record peak struck on February 14, confirming a technical correction.
Futures pointed to a lower start for Wall Street at the reopen, with S&P 500 futures losing 0.5 per cent and Nasdaq futures off 0.8 per cent.
Pan-European STOXX 50 futures slipped 0.5 per cent.
Beaten-down US tech shares led a rebound on Wall Street on Wednesday after data showed US consumer prices rose at the slowest pace since October last month.
The inflation figures were closely watched following a recent run of softer economic data, but ultimately did not capture the impact from Trump’s tariff campaign.
“This, though, still strikes me as a market that simply cannot hold onto any gains at the moment, which should be a big old red flag for any potential dip buyers out there,” said Michael Brown, senior research strategist at Pepperstone.
“Along with my bearish equity bias, I still favour a bullish bond view, particularly as risks increasingly tilt to the downside for the US economy.”
Trump’s increased tariffs on all US steel and aluminium imports took effect on Wednesday, stepping up a campaign to reorder global trade in favour of the US and drawing swift retaliation from Canada and Europe.
“Uncertainty remains in the air as the outlook for consumer price inflation remains blurred by trade policy developments,” TD Securities analysts wrote in a client note.
“The impact from the recent implementation of tariffs on Chinese, Canadian and Mexican goods and the expectation of further announcements suggest the worst is yet to come.”
Gold rose 0.5 per cent to as high as US$2,947.06, closing in on the record high from February 24 at US$2,956.15.
US Treasury yields declined, with the two-year yield easing 2 basis points to 3.974 per cent after rising as high as 4.005 per cent on Wednesday.
The yen strengthened about 0.4 per cent to 147.70 per dollar.
The euro edged 0.1 per cent lower to US$1.0879.
Crude oil eased back following Wednesday’s rally. Brent futures lost 0.3 per cent to US$70.77 a barrel, while US West Texas Intermediate crude futures declined 0.4 per cent to US$67.44 a barrel. — Reuters
