Sun, Jun 03, 2018 - Page 14 News List

US tariffs upstage China MSCI inclusion, roil Asia


Asian stocks were mixed on Friday, after US President Donald Trump’s tariffs on imports from key allies sent US and European stocks into a tailspin and the US dollar climbed against most major peers.

“The hard thing about protectionism, the hard thing about tariffs and quotas, is that you can almost think of it as it’s a slow-moving disease, but it’s deadly,” Invesco Ltd chief global market strategist Kristina Hooper said in an interview at Bloomberg’s New York headquarters. “When I look at protectionism, I don’t believe the market truly can price it in at this point because there’s still so many potential iterations.”

The MSCI Asia-Pacific Index on Friday slipped 0.04 percent to end the day at 172.13, down 0.8 percent from last week’s 173.49.

The weighted index on the Taiwan Stock Exchange rose 74.12 points, or 0.68 percent, to close at 10,949.08.

For the week, the TAIEX was little changed from last week’s close at 10,942.30.

Chinese stocks fell on Friday as US tariffs reignited fears of a global trade war, overshadowing the long-awaited inclusion of A-shares in MSCI Inc’s benchmark indices, which had been expected to trigger a surge of cash from foreign investors.

The addition was upstaged overnight after the US slapped tariffs on metal imports from major allies and several quickly retaliated, days ahead of a third round of trade talks between Washington and Beijing, which were already looking rocky.

“There was a lot of media hype around the MSCI inclusion. Now it’s history,” Shanshan Finance (杉杉金融) head of equity trading Wu Kan said.

“Foreign institutional investors are very rational. They won’t just rush into China hot-headed,” he said.

The Shanghai Composite Index started out flat, but ended the day down 0.7 percent, while the benchmark CSI300 dropped 0.8 percent.

In Hong Kong, the Hang Seng China Enterprises Index, which tracks Chinese shares, bounced between negative and positive territory to end the day up 0.4 percent.

Hong Kong’s blue-chip index was little changed.

Japan’s TOPIX on Friday rose 0.2 percent and South Korea’s KOSPI increased 0.7 percent, while Australia’s S&P/ASX200 Index shed 0.3 percent.

Additional reporting by CNA and Reuters

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