The list of worries for global markets is growing, and Chinese stock falls just led a nasty session in Asia

STR/AFP/Getty ImagesLightning strike over a pagoda in Yangzhou, east China’s Jiangsu province.

Asian markets are under pressure, continuing the risk-off theme seen late on Thursday.

The losses have been particularly acute in China.

As seen in the stocks scoreboard below as at 5pm in Sydney, stocks were under pressure across the region, adding to the woes seen in emerging markets overnight.

Australia ASX 200 6045.20 , -0.20%
Japan TOPIX 1781.44 , -0.42%
Shanghai Comp 3067.13 , -1.36%
Shenzhen Comp 1747.26 , -1.17%
HK Hang Seng 30975.41 , -1.70%
Sth Korea KOSPI 2451.58 , -0.77%
Sinagpore STI 3439.91 , -0.96%
Taiwan TAIEX 11156.42 , -0.85%
Philippines PSI 7750.22 , -0.68%
Indonesia JKSE 6056.66 , -0.82%
Malaysia KLCI Index 1774.13 , -0.65%
Thailand SET 1730.3 , -0.16%
India Nifty 50 10716.25 , -0.48%
S&P 500 Futures 2765.5 , -0.24%

The US dollar is also modestly stronger, reflective of the overall tone across the region.

AUD/USD 0.7576 , -0.64%
NZD/USD 0.7009 , -0.24%
USD/JPY 109.43 , -0.24%
USD/CNY 6.4066 , 0.28%
USD/CNH 6.4034 , 0.23%
USD/HKD 7.8453 , -0.01%
USD/KRW 1075 , 0.32%
USD/SGD 1.3348 , 0.09%
USD/TWD 29.80 , 0.12%
USD/PHP 52.65 , 0.30%
USD/MYR 3.984 , 0.21%
USD/IDR 13920 , 0.40%
USD/THB 32.07 , 0.16%
USD/INR 67.53 , 0.18%
US Dollar Index 93.60 , 0.21%

As for the reason behind the caution, well, take your pick.

A series of tweets from US President Donald Trump just before Asian trade got underway has certainly created a few nerves, suggesting the G7 summit in Canada this weekend will be a spicy affair.

Trade tensions are certainly a factor behind the weak performance in Asia, especially following news that China’s trade surplus with the United States increased in May, taking the cumulative surplus to over $US100 billion so far this year.

However, whether the risk-off mood can be completely explained by trade tensions is questionable, particularly as they’re hardly new.

One suspects there’s also some nervousness about next week’s European Central Bank (ECB) meeting given mounting speculation that it may announce an end-date for its asset purchase program later in the year.

At a time when the US Federal Reserve is already undertaking quantitative tightening, the removal of another major source of central bank liquidity will provide a stern test to asset valuations in emerging markets, especially those who rely on foreign capital flows.

It’s no coincidence that the latest ructions across emerging markets have coincided with increased speculation that the era of ECB QE could soon come to an end.

If that announcement does arrive next week, it will removal another key back-stop that has supported financial markets for the best part of a decade.

Whether fundamentals are enough to justify current valuations look like they’ll soon be put to the test.

Especially in emerging markets, including those in Asia.

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