HONG KONG: Asian markets mostly reversed early losses Wednesday but investors remain nervous as the possibility of a US-EU trade war shifted into focus after Washington’s tariffs threat, while they were also spooked by Brexit uncertainty.
The warning from US President Donald Trump’s administration that it would impose levies on more than $11 billion of European imports jolted investors, who had been enjoying a positive run of late thanks to optimism over China-US trade talks, reports AFP.The development — linked to EU subsidies for planemaker Airbus that Trump says hurt US giant Boeing — stoked concerns about the White House’s hardline protectionist agenda that has taken aim at its biggest trading partners since the tycoon’s election.
It also comes despite negotiators holding a series of meetings since last year ahead of proposed trade talks to resolve the dispute.
“The primary market issues are that this could unwind much of the positivity around a comprehensive trade resolution as the US trade hawks continue to apply pressure on longtime allies,” said Stephen Innes at SPI Asset Management.
“Friend or foe, the latest headline suggests no country is exempt from the wrath of President Trump’s trade agenda.”
The move could dent a rally that has seen markets across the globe enjoy a blockbuster start to the year with most up at multi-month highs.
All three main Wall Street indexes ended lower Tuesday and while the losses seeped through to Asia in the morning the region’s markets picked up as the day wore on.Hong Kong dipped 0.1 percent and Tokyo ended off 0.5 percent, while there were also losses in Wellington and Jakarta.
However, Shanghai ended up 0.1 percent, Seoul rose 0.5 percent and Singapore gained 0.1 percent with Sydney, Taipei, Manila and Bangkok also in the ascendance.
In early trade London rose 0.1 percent, while Frankfurt added 0.4 percent and Paris gained 0.3 percent.
Upheaval in world trade was among the major reasons the International Monetary Fund trimmed its 2019 global growth forecast, with Brexit adding to its worries.