US-China trade war fears, stocks and currencies in focus
In Tokyo, the Nikkei 225 fell 4.51 percent, or 974.13 points, to close at 20,617.86 after earlier dropping to its lowest levels in more than five months. The benchmark also fell 4.88 percent for the week.
Gains in the yen, which touched its highest levels in 16-months earlier and slipped below the 105 mark, on trade-related fears also did not help stocks. Major exporters were downbeat, with Honda Motor falling 5.27 percent and Sony losing 2.73 percent.
The broader Topix lost 3.62 percent amid a broad-based sell-off. The Topix machinery and mining indexes were among the biggest losers, falling 5.62 percent and 4.45 percent, respectively.
|ASX 200||S&P/ASX 200||5820.70||-116.50||-1.96%|
|CNBC 100||CNBC 100 ASIA IDX||8583.31||-234.02||-2.65%|
Greater China markets plunged in early trade, with Hong Kong's Hang Seng Index sinking 3.16 percent by 3:00 p.m. HK/SIN. Beyond trade tensions, the market was also weighed down by a 4.55 percent slide by 3:10 p.m. HK/SIN in index heavyweight Tencent due to a major shareholder's plan to sell its stake in the tech company.
Stocks on the mainland also came under pressure from mounting trade tensions. The Shanghai composite dropped 3.38 percent to close at 3,153.09 and the Shenzhen composite lost 4.49 percent to end at 1,766.61.
In Sydney, the S&P/ASX 200 slid 1.96 percent to finish at 5,820.70 as all sectors closed in the red. Declines were led by the materials subindex, which lost 2.68 percent. Oil producers were also weaker.
Meanwhile, most steel and aluminum plays in the region took a beating. In China, Baoshan Iron & Steel closed down 3.87 percent, and Aluminum Corp of China (Chalco) fell 3.51 percent.
South Korean steel stocks also saw steep losses, with Posco falling 5.58 percent by the end of the day. Dongbu Steel, a smaller player, pared early gains to close down 6.09 percent. South Korea is one of the countries temporarily exempt from recent U.S. steel tariffs.
Trade jitters spook markets
The tariffs largely focus on technology sector goods and were intended to penalize China for, according to the Trump administration, stealing intellectual property.
Trump had signed off on tariffs on steel and aluminum imports earlier this month, although several countries were exempt. Markets are worried that subsequent retaliatory actions from U.S. trading partners could result in a trade war.
In response, China on Friday proposed a list of 128 U.S. products as potential retaliation targets, according to a government statement.
The fact that Trump's "announcement was a proposal rather than an action on trade indicates this may be used as a negotiating tactic," Diana Mousina, senior economist at Sydney-based AMP Capital said in a morning note.
Still, others worried that the tougher talk on trade could potentially lead to more significant consequences.
"[T]he real risk is that this escalates into tit-for-tat trade wars," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.
— CNBC's Kevin Breuninger, Kayla Tausche and Nyshka Chandran contributed to this report.
European stocks follow Wall Street lower as trade war fears escalate
Europe's autos led the losses, off by 1.9 percent amid escalating concerns of a tit-for-tat trade war. President Donald Trump moved towards long-promised anti-China charges on Thursday, triggering a stern response from Beijing.
In individual stocks, shares of Indivior tanked 21 percent shortly after the opening bell after a U.S. court ruled in favor of a competitor. However, the maker of opioid addiction treatment Suboxone Film quickly recovered most of its losses after the group said it would fight the ruling. Shares of Indivior were 6.2 percent lower.
Next was a rare gainer on the Stoxx 600, surging to the top of the European benchmark after optimistic comments from the British clothing chain's CEO Simon Wolfson. The company reported an 8 percent fall in annual profit in 2017, saying it was the most challenging year the company had faced in 25 years. Nonetheless, despite projecting a third consecutive decline this year, its shares were over more than 7.6.
GlaxoSmithKline was also trading higher after it pulled out of the bidding for Pfizer's consumer health business. The company followed hot on the heels of Reckitt Benckiser, which withdrew its interest earlier in the week. Shares of GlaxoSmithKline were up almost 3.3 percent on the news.
Trade war fears
Trump's memorandum proposing charges on up to $60 billion worth of Chinese products was met with China warning of retaliatory tariffs targeting $3 billion of U.S. goods. Chinese authorities said they could hit 128 U.S. products with tariffs in response.
Trump said the taxes were intended to penalize China for allegedly stealing Washington's intellectual property.
The U.S. president also announced exemptions for the European Union and six other countries, at least temporarily, from the steel and aluminum tariffs.
In Italy, political parties looked to secure a parliamentary deal on Friday, but a new government is far from being put together after the inconclusive election earlier this month. Italy's parliament will open for the first time since the March 4 vote.
European leaders continued their second day of meetings in Brussels.
Dow drops more than 400 points into correction, posts worst week since Jan. 2016
The Dow Jones industrial average dropped 424.69 points to close at 23,533.20 — its lowest level since November — with DowDuPont as the worst-performing stock. The 30-stock index also closed in correction, down 11.6 percent from its 52-week high.
The S&P 500 declined 2.1 percent to 2,588.26, with financials pulling back 3 percent. It also closed just outside correction territory. The Nasdaq composite fell 2.4 percent to 6,992.67. The indexes, along with the Dow, had traded higher earlier in the session.
"People are a little worried ahead of the weekend. You can see that people have been buying a little bit of the options that expire next week which would give you a little protection over the weekend," said Patrick Kernan of Cardinal Capital. Kernan, who trades in the pit at the Cboe, said the sell off this week has been a lot more orderly than February's decline. "There's not lots of panic," he said.
Week to date, the major averages posted their worst week since January 2016. The Dow and S&P 500 dropped 5.7 percent and 5.9 percent, respectively, while the Nasdaq pulled back 6.5 percent. The week also ended with eight of 11 S&P 500 sectors in correction.
"We think the outlook on stocks is pretty balanced," said Eric Freedman, chief investment officer at U.S. Bank Wealth Management. "While we think corporate earnings are intact, the market is going to have to digest some pretty meaty events like the midterm election as well as all the trade policy news."
President Donald Trump pressed ahead with long-promised anti-China charges on Thursday. The U.S. president signed an executive memorandum that will impose tariffs on up to $60 billion in Chinese imports.
In response, China's commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website posted Friday morning. Beijing's ministry said it will take measures against the 128 U.S. goods in two stages if it cannot reach an agreement with Washington, adding that it could also take legal action under World Trade Organization rules.
"The response from the Chinese was fairly muted," said Quincy Krosby, chief market strategist at Prudential Financial. "Because it was cautionary in tone, I think the market is looking for something more specific."
China's announcement sent stock futures lower overnight before they recovered. The news also comes after Dow lost more than 700 points in the previous session, while the S&P 500 and Nasdaq declined more than 2 percent.
Tech has also put the broader market under pressure this week as shares of Facebook dropped 13.8 percent in that time period. Facebook dropped sharply this week on news that Cambridge Analytica gathered data from 50 million Facebook profiles without the permission of its users. On Friday, the stock fell 3.3 percent.
Bank stocks have also been under pressure. The SPDR S&P Bank ETF (KBE) fell 3.4 percent Friday and was headed for a weekly decline of 7.6 percent. Bank of America pulled back 4.5 percent.
Stocks briefly bounded earlier on Friday after Trump said he signed the $1.3 trillion omnibus spending bill into law Friday, despite threatening to veto the legislation earlier in the day.
Trump signed the bill, but made his distaste for the rushed process known.
"I will never sign a bill like this again," Trump said during a news conference. "As a matter of national security, I've signed this omnibus bill."
In a tweet earlier in the day, Trump said: "I am considering a VETO of the Omnibus Spending Bill based on the fact that the 800,000 plus DACA recipients have been totally abandoned by the Democrats (not even mentioned in Bill) and the BORDER WALL, which is desperately needed for our National Defense, is not fully funded."
In corporate news, shares of Dow-component Nike rose slightly after the apparel company reported better-than-expected earnings. Nike got a boost from sales in Greater China, which rose 24 percent during the third quarter.
—CNBC's Nyshka Chandran and Patti Domm contributed to this report.