Asian stock markets tumbled in early trading Tuesday, following Wall Street’s worst day of the year as trade tensions between the U.S. and China grew even worse.
Japan’s Nikkei NIK, -2.34% sank 2.%, while South Korea’s Kospi 180721, -1.71% fell 1.9% and Australia’s S&P/ASX 200 XJO, -2.67% slid 2.5%.
Among individual stocks, SoftBank 9984, -4.74% fell in Tokyo trading, as did Toyota 7203, -3.35% and Fast Retailing 9983, -1.97% . Samsung 005930, -1.59% and SK Hynix 000660, -2.79% dropped in South Korea, while Beach Energy BPT, -3.62% and Westpac Banking WBC, -3.06% declined in Australia.
Late Monday, the U.S. Treasury Department labeled China a currency manipulator for the first time since 1994, opening the door to new sanctions and ratcheting up already high trade tensions. Earlier, China’s currency, the yuan CNYUSD, -0.0013% , broke a “line in the sand” below 7 U.S. dollars, apparently in retaliation for President Donald Trump’s announcement last week of new 10% tariffs against an additional $300 billion of Chinese goods, effective Sept. 1. China also confirmed it was suspending purchases of U.S. agricultural products.
In a note late Monday, Stephen Innes, managing partner of VM Markets, said of the Treasury Department’s declaration: “While a mostly symbolic gesture, it underscores rising trade tension and does also increase the likelihood of U.S. Treasury intervention which has traders preparing for worst-case scenarios: a protracted equity market sell-off, lower U.S. bond yields while provoking a stampede into safe havens. . . . How the yuan trades today will be critical for the market’s sentiment.”
Earlier, Wall Street suffered its worst day of 2019, with the Dow Jones Industrial Average shedding more than 767 points. The Dow DJIA, -2.90% ended the day down 2.9%, at 25,717.74 , while the S&P SPX, -2.98% declined 87.31 points, or 3%, to close at 2,844.74. The Nasdaq Composite COMP, -3.47% shed 278.03 points to finish at 7,726.04, a decline of 3.5%.
U.S. stock futures fell as well late Monday, suggesting more steep losses when trading opens Tuesday. Dow Jones Industrial Average futures YM00, -1.10% were last down more than 300 points, or 1.2%.
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