Asian shares suffered a fresh bout of the shakes on Friday as tough words on trade from China’s media drowned out upbeat news on the US economy and corporate earnings.
Shanghai stocks led the way into the red amid the growing fallout from US President Donald Trump’s move to block China’s Huawei Technologies Co (華為) from buying vital US technology.
The sense of foreboding grew as the Chinese Communist Party’s People’s Daily used a front-page commentary to evoke the patriotic spirit of past wars, saying the trade spat would never bring China down.
“It is hard to get too excited as the news flows in the trade front points to an escalation rather than an ease in tensions,” said Rodrigo Catril, senior foreign-exchange strategist at National Australia Bank.
“Many commentators are suggesting the decision on Huawei and other Chinese telecos effectively means the president has taken the ‘nuclear option’ and it has now moved towards a ‘fully-fledged’ tech war with China,” he said.
Shanghai blue chips fell 2.1 percent, while the offshore yuan eased past 6.9400 per dollar for the first time since November last year.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost early gains to fall 0.7 percent, leaving it at 15-week lows and down 2.6 percent for the week.
The weighted index on the Taiwan Stock Exchange ended down 90.50 points, or 0.86 percent, at the day’s low of 10,384.11. That brought the TAIEX’s weekly loss to 3 percent, from last week’s 10,712.99 points.
Japan’s Nikkei on Friday did manage to bounce 0.9 percent, while Australia’s S&P ASX 200 climbed to an 11-year peak as higher commodity prices boosted miners.
Hong Kong stocks touched their lowest close in more than three months.
At the close of trade, the Hang Seng index was down 1.2 percent at 27,946.46 points, down 2 percent for the week.
The Hang Seng China Enterprises index on Friday closed 1.1 percent lower, down 2.2 percent for the week.
The sub-index of the Hang Seng tracking energy shares ended down 1.1 percent, while the IT sector closed 2.2 percent weaker, the financial sector ended 0.9 percent lower and the property sector closed 1.5 percent down.
An index representing IT hardware makers shed 4.4 percent to its lowest level since Jan. 29.
Additional reporting by CNA, with staff writer
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