Hong Kong: Stocks end with big losses

  • Hong Kong: Stocks end with big losses

Hong Kong: Stocks end with big losses

Asian stocks followed their USA counterparts lower Tuesday as political unrest in Hong Kong and Argentina added to trade concerns and knocked sentiment.

"The stock market's selling off because the bond market is rallying like insane", said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. Hong Kong futures dropped more than 1% after regular trading closed Monday.

Wall Street was set to open lower on August 12, as investors shunned risky bets on fears that a drawn-out trade war between the United States and China could force the global economy into recession.

Last week, Trump said he'd be "fine" if the USA and China don't go ahead with a meeting next month, dampening investors' hopes for a path to resolving the economically damaging trade war. -China trade war stoked fears of impending recession.

Trump has promised 10% tariffs on some $300 billion in Chinese imports that haven't already been hit with tariffs of 25%.

Traders continued to shift money into bonds Monday, bidding up bond prices. The yield is used as a benchmark for interest rates on mortgages and other consumer loans. Citigroup, Goldman Sachs and Bank of America all lost more than two percent. Credit card issuer Synchrony Financial slid 3.9% and Capital One Financial dropped 2.3%. Symantec dropped 5.7%, Nektar Therapeutics slumped 11.2% and Tractor Supply fell 4.7%. Traders usually seek the shelter of dividend-friendly utilities and bonds when they want a more secure place to put their money because of concerns over economic growth.

Major stock markets outside the USA were mixed Monday, with indexes in Europe closed broadly lower while those in Asia ended broadly higher.

Investors were rattled by a Chinese government statement Monday saying mostly nonviolent protests in Hong Kong were "beginning to show the sprouts of terrorism" and were an "existential threat" to the population.

Protests in Hong Kong that crippled one of the busiest airports of the world and defeat of President Mauricio Macri during primary elections in Argentina bolstered demand for safe-haven assets, including the Japanese yen, gold and U.S. Treasuries.

Investors are facing a relatively slow week as far as economic reports and corporate earnings. Core prices, which exclude food and energy, are seen rising 2.1%.Wednesday brings data on China retail sales, industrial production and the jobless rate.Thursday sees the release of US jobless claims, industrial production and retail sales data.

Second-quarter reporting season is approaching the finish line, with 452 of the companies in the S&P 500 having reported.

West Texas Intermediate crude sank 0.8 per cent to US$54.47 a barrel. Brent crude, used to price worldwide oils, declined 19 cents to $58.38 per barrel in London.

CURRENCY: The dollar gained to 105.57 yen from Monday's 105.30 yen. Gold headed higher above $1,500 an ounce.