US-China Tensions Heighten Fluctuations in Asia-Pacific Markets
The ongoing US-China tensions have potentially impacted the reopening economies of both the countries. China’s decision to enact a controversial national security law on Hong Kong has heightened the current chaos. Its political tensions with other nations such as the US, Australia and the UK have further pushed the global equities to more losses as compared to gain.
On Wednesday, the Asia-Pacific market shares exhibited a mixed response. The analysts believed that it was a result of the heightening tensions between the US and China. Some are of the opinion that the COVID-19 pandemic is simultaneously playing an important role in reducing the investor sentiment in Asia-Pacific stock reopening.
The stocks of Chinese mainland remained lowered throughout the day. The Shanghai composite slipped 0.34 percent to about 2,836.80, while the Shenzhen composite declined 0.855 percent to around 1,774.22. The lowering stocks equally impacted Hong Kong’s Hang Seng Index that steeped 0.71 percent, by its final hour of trading.
Neighbouring countries like Japan and South Korea seemed to have been at an advantage in stocks amid the soaring tensions. Japan’s Nikkei, which is also the stock market index for the Tokyo Stock Exchange, rose 0.7 percent to close at 21,419.23. The 2.81 percent surge in shares of robot maker Fanuc was found to be an important reason behind it. The Topix index also added 0.96% in the rise, thereby ending its trading day at 1,549.47.
Meanwhile in South Korea, the Kopsi closed fractionally higher at 2,031.20. Australia’s S&P/ASX 200 finished its trading day slightly lower at 5,775. Overall, the MSCI Asia-ex Japan index shed 0.28 percent. On the other hand, the US dollar index last traded at 99.114 after slipping from levels above 99.2 earlier.
Amid the crisis, it appears as if the investors are continuously keeping an eye over the US-China tensions. For a long time, both the US and China have largely been involved in trade war that had numerable consequences. The sanctions on import and export of goods has existed ever-since.
In the wake of COVID-19 crisis and chaos on Hong Kong’s autonomy, US has been considering to sanction some of the Chinese firms and officials. Though no firm decision has been taken till date. A US announcement to China’s actions is expected by the end of this week.
The announcement would further mount US-China tensions and impact the global economy that seems to be fragile under the COVID-19 pandemic spread. However, the investors are not surprised by it. Instead they are now being cautious on multiple fronts with the reopening of Asia-Pacific economies.
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