- Equities in Asia are down, with Chinese markets knocking back sharply in a US-China trade war ramp-up.
- Japan’s Nikkei index is exposed to further downside, with the index failing to set into further highs for June.
Asia stocks are sharply lower for Tuesday, especially in China as markets are recoiling from another series of tariffs, these targeting $200 billion in Chinese goods, promised by the US late Monday. In Japan, the Nikkei 225 index is also stepping lower as market sentiment dries up for the week, with the major index dipping into 22,380.00.
The tariff spat between the US and China is heating up, with the US President, Donald Trump, ordering the US trade representative to identify another $200 billion in Chinese goods for additional tariffs as trade tensions spiral out, with the US intending to impose further tariffs on China after the Chinese quickly responded last week with their own targeted tariffs after the US’ initial raft of $50 billion in tariffs last week.
Further hampering equities in Asia is the now-souring ZTE deal. Donald Trump initially promised to provide US market access for the Chinese company during trade negotiations, but the US Senate voted on Monday to move to block the ZTE forgiveness, and the company is set to once again be locked out of US markets for violating US trade rules by selling US goods and technology to Iran and North Korea.
Australia’s ASX is mostly flat for the day, up a scant 0.27%, while the Shanghai Composite is down almost 3.0% and Hong Kong’s Hang Seng is down -2.2%, and Japan’s Nikkei is also down near -1.10%.
Nikkei 225 levels to watch
The Nikkei index is accelerating off of recent highs near the 23,000.00 key level, and the index is now trading back into 22,300.00. Further downside could see support from May’s lows near 21,900.00, while an upside recovery will have to push back through May’s highs at 23,040.00 in order to establish a new bull trend.
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