Asian markets fell today as tensions between the US and China seemed to have escalated, causing further concern on global economic growth.

It seems as though markets have begun the month in a nervous manner. This week has already seen investors abandon stocks on concern the US-China conflict over trade and foreign policy is nowhere near being resolved.

Hopes that the two sides could reach a truce faded quickly. Washington’s decision to impose visa bans on Chinese officials – linked to the mass detention of Muslims in Xinjiang province – combined with adding further Chinese companies to a US-trade blacklist, have both weighed on the hopes that a truce would be reached at upcoming negotiations.

The ongoing dispute seems to be adding more damage to an already fragile global economy. If no progress is made at the negotiations, Chinese imports are set to rise on October 15th, according to President Trump.

Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo, has said:

Stock markets are still trying to price in the slowdown in global growth. The dispute between the United States and China shows no sign of ending. We’re losing confidence in the U.S. economy. There’s more uncertainty about where the Fed is really headed.

While US stock futures increased by 0.16%, sentiment has remained weak. Following the announcement of the US visa restrictions, S&P 500 closed 1.56% lower yesterday.

In the US, Fed Chairman Jerome Powell has hinted at further interest rate cuts after the recent drop in market rates, causing the US Treasury yield curve to steepen.  

Ongoing concerns of continued violent protests against China’s rule of the former British colony has resulted in a fall of 0.68% in Hong Kong shares. As for Japan, Nikkei fell by 0.73%, its biggest decline in a week. 

AAPL, of tech-giant Apple Inc, also suffered a loss in Greater China. 

Elsewhere, Germany’s DAX increased by 0.03%. US crude fell 0.48% to $52.38 per barrel. Brent crude also fell 0.41% to $58.00 a barrel.

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Dalia Hilmi

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