Asian stocks are getting smoked as trade tensions ignite

YASUYOSHI CHIBA/AFP/Getty Images

Asian stocks are getting hammered, driven lower by escalating trade tensions between the United States and China.

As seen in the scoreboard below at at 1.45pm in Sydney, most major markets across the region are trading deep in the red in many instances.

Just look at the scale of the drop in Chinese markets.

Australia ASX 200 6128.70 , 0.40%
NZ NZX 50 8927.86 , -0.52%
Japan TOPIX 1756.88 , -0.82%
Shanghai Comp 2932.08 , -2.97%
Shenzhen Comp 1620.63 , -4.20%
HK Hang Seng 29701.36 , -2.01%
Sth Korea KOSPI 2358.81 , -0.73%
Sinagpore STI 3335.22 , 0.34%
Taiwan TAIEX 10940.69 , -1.32%
Philippines PSI 7309 , -1.42%
Indonesia JKSE 7309 , -1.85%
Thailand SET 1667.22 , -0.74%
S&P 500 Futures 2756 , -0.85%

US S&P 500 futures are also off 0.85%, mirroring similar moves in many European stock futures.

The latest declines follow news that US President Donald Trump has directed the US Trade Representative’s office to draw up a list of $US200 billion worth of Chinese goods to subject to an additional 10% tariff, coming on top of prior tariffs announced just three days ago.

“Today I directed the United States Trade Representative to identify $US200 billion worth of Chinese goods for additional tariffs at a rate of 10%,” Trump said in a statement. “After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced.”

Only three days ago, the US government announced $US50 billion worth of Chinese imports that will be subject to 25% tariffs.

In response to the US move, China announced retaliatory tariffs on $US50 billion worth of US goods.

The escalation in trade tensions is not only dragging on stocks across the Asian region but also commodity markets with the exception of precious metals.

Brent Crude $74.86 , -0.64%
Gold $1,283.66 , 0.45%
Silver $16.52 , 0.74%
SHFE Rebar ¥3,785 , -2.50%
DCE Iron Ore ¥450.50 , -4.56%
DCE Coking Coal ¥1,209.00 , -3.20%
DCE Coke ¥2,102.50 , -3.31%

Reflecting the flight to safety, benchmark 10-year government bond yields have also fallen modestly.

United States 2.884% , -0.042%
Japan 0.027% , -0.002%
Australia 2.624% , -0.042%

NOW READ: Trump threatens all-out trade war with China, tariffs on $200 billion worth of goods

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