HONG KONG: Fears of a trade war between the world's top two economies weighed on Asian stocks on Wednesday (Apr 4), with several major markets closing in the red despite a recovery on Wall Street.
Markets in Japan and Australia clung on to marginal gains but China, Hong Kong and South Korea dipped into the red, delivering a mixed picture across the region.
Tokyo opened strongly but stocks sank throughout the trading day, finishing only 0.13 per cent up at 21,319.55. The broader Topix index closed with similar gains.
The Japanese market was helped by an earlier bounce in US stocks and a weaker yen which helps exporters, said Hikaru Sato, senior technical analyst at Daiwa Securities.
The dollar was trading at ¥106.56 against ¥106.60 in New York on Tuesday, rising from levels below 106 seen a day earlier.
"But buying remained limited as investors are still concerned about several uncertain elements, including a US-led trade war," Sato told AFP.
The United States has published a list of Chinese imports worth around US$50 billion that could be targeted by tariffs - a significant escalation in the confrontation with Beijing.
China responded sharply, saying it was ready to retaliate against what it described as a "unilateralistic and protectionist" move that serves neither country's interests.
The prospect of a trade war between the US and China "continues to cast a dark shadow over global capital markets", warned Stephen Innes, an analyst at OANDA.
China's main market, the Shanghai Composite Index, closed down 0.15 per cent to end the day at 3,131.84 points, erasing some healthy gains earlier in the session.
Leading the decliners in Asia was the Hang Seng index in Hong Kong, which ended down 2.2 per cent.
The Asia trading day followed a volatile session on Wall Street, where US stocks finished Tuesday with a strong rally.
The Dow Jones Index closed up 1.7 per cent and the broad-based S&P 500 was up 1.3 per cent.
The tech-heavy Nasdaq also finished in the black, up 1.0 per cent, mainly on bargain-hunting after suffering a pummelling in recent days.
Large technology companies that have been slumping all enjoyed gains, including Facebook, Google parent Alphabet and Intel.
Amazon also pushed 1.5 per cent higher as investors welcomed headlines which suggested President Donald Trump did not plan to follow up a series of irate tweets with concrete action against the company.
Meanwhile, Europe markets were directionless at the open. The FTSE in London and the Paris CAC 40 opened up 0.1 per cent while the Frankfurt DAX was flat.
- Key figures around 0730 GMT -
Tokyo - Nikkei 225: UP 0.1 per cent at 21,319.55 (close)
Hong Kong - Hang Seng: DOWN 2.2 per cent at 29,518.69 (close)
Shanghai - Composite: DOWN 0.1 per cent at 3,131.84
Dollar/yen: DOWN at ¥106.56 from ¥106.60 at 0230 GMT
Euro/dollar: DOWN at US$1.2264 from US$1.2275 at 0230 GMT
Pound/dollar: DOWN at US$1.4064 from US$1.4076 at 0230 GMT
Oil - Brent North Sea: DOWN 1 cent at US$67.89 per barrel
Oil - West Texas Intermediate: UP 1 cent at US$63.31 per barrel
New York - Dow: UP 1.7 per cent at 24,033.36 (close)
London - FTSE 100: UP 0.1 per cent at 7,034.93 points (open)