Most Asian markets close lower as trade concerns return to focus
In Japan, the Nikkei 225 declined 1.11 percent, or 252.73 points, to 22,437.01 on the firmer yen, extending losses in the last session. Autos traded lower, as did other major exporters as the yen rose around 0.4 percent to trade at 109.58 to the dollar. The broader Topix fell 1.21 percent.
|ASX 200||S&P/ASX 200||6037.10||4.60||0.08%|
|CNBC 100||CNBC 100 ASIA IDX||8617.92||-16.71||-0.19%|
Greater China markets were narrowly mixed. The Hang Seng Index edged higher by 0.07 percent by 3:02 p.m. HK/SIN and on the mainland, the Shanghai composite slipped 0.44 percent to 3,154.89. MSCI's index of shares in Asia Pacific excluding Japan tacked on 0.18 percent in Asia afternoon trade.
The U.S. Department of Commerce started an investigation into automobile imports on a "national security" basis, the agency announced Wednesday during U.S. hours. The surprise announcement comes at a time of worsening friction over international trade between the United States and its allies.
Stocks of South Korean automakers were broadly lower on Thursday, with Hyundai Motor down 3.11 percent and Kia Motors sliding 2.82 percent. Japanese automakers, which had been under pressure from the firmer yen, also saw declines: Toyota Motor lost 3.05 percent and Honda Motor fell 3.39 percent.
The latest trade-related development came after U.S. President Donald Trump said Wednesday that the current framework used in trade talks with China was "too hard to get done." Trump had said he was "not satisfied" with recent negotiations with China earlier in the week.
"It's not clear what the end game is here because this is not a game anymore of just targeting a particular country. This obviously has spillovers into your own country, but also into other allies as well, so again, I wouldn't get hung up over the economics of all of this," Dwyfor Evans, head of Asia Pacific macro strategy at State Street Global Markets, told CNBC's "Squawk Box."
"I would think of this purely as probably a six-month run-up to the mid-term [elections in the U.S.]," he added.
Markets in Southeast Asia were mixed, Singapore's Straits Times Index rose 0.72 percent and the Jakarta Composite was up 2.63 percent at 3:04 p.m. HK/SIN, while Malaysia's KLCI was lower by 1.4 percent.
On Wednesday, U.S. stocks finished the last session with slight gains after the Federal Reserve said in its minutes that it was comfortable with inflation temporarily running above their target of 2 percent.
The minutes from the Fed's latest meeting in May showed officials at the central bank generally thought inflation would continue to rise, but differences arose over how confident the Fed should be after years of undershooting. Still, there appeared to be agreement that allowing the economy to rev up a little would be appropriate.
The dollar index, which tracks the greenback against a basket of currencies, was steady at 93.858 at 2:48 p.m. HK/SIN after trading as high as 94.188 overnight following the release of the Fed's minutes.
Meanwhile, the Turkish lira gave up some of its gains made after the country's central bank raised interest rates by 300 bps overnight. The lira traded at 4.7 against the dollar compared to its previous close of 4.59. The currency has fallen around 20 percent this year, according to Reuters.
Of note, the Bank of Korea on Thursday announced it would be keeping rates on hold at 1.5 percent, a move that was expected by markets.
— CNBC's Jeff Cox and Ted Kemp contributed to this report.
European markets close lower as Trump cancels North Korea summit; Aryzta tumbles 26%
Trump said he hadwritten a letter to North Korean leader Kim Jong Un saying that their planned summit next month was canceled. The meeting, which would have marked the first face-to-face encounter between a sitting U.S. president and a North Korean leader, was set for June 12 in the southeastern Asian island city state.
Europe's autos stocks led the losses, down more than 1.8 percent following an announcement from the U.S. that it plans to investigate whether an "abuse of trade tactics" in cars could harm the world's largest economy. The surprise move appeared to exacerbate fears of fresh global charges. Porsche, Daimler and BMW were 3.02, 2.77 and 1.69 percent lower respectively.
Food & Beverages stocks were the top performers Thursday, up 0.83 percent.
Looking at individual stocks, Electrocomponents soared to the top of index as it reported a 32 percent rise in full-year pre-tax profits on Thursday. The London-listed stock also announced it had reached an agreement to acquire outsourcing firm IESA for around £88 million ($117.5 million). Shares of Electrocomponents were over 16 percent higher.
Swiss food company Aryzta slumped to the bottom of the European benchmark amid earnings news. The firm reported a 17 percent drop in third-quarter revenues on Thursday and slashed its earnings outlook for the second time this fiscal year. Its shares were more than 26 percent lower.
Meanwhile, adding to souring investor sentiment, Trump said Wednesday that an ongoing trade dispute between Washington and Beijing would need "a different structure." In response, China's Commerce Ministry said Thursday it had not promised to slash its trade surplus with the U.S. by a specific figure.
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Dow closes down after President Trump cancels North Korea summit
The Dow Jones industrial average fell roughly 75 points by the closing bell, well off a 280-point drop earlier in the session. The S&P 500 shed 0.2 percent thanks to a 1.6 percent fall in energy stocks and a slip in oil prices.
The Nasdaq composite closed largely unchanged.
The meeting would have been the first face-to-face encounter between a sitting U.S. president and a North Korean leader.
"Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I feel it is inappropriate, at this time, to have this long-planned meeting," Trump wrote in the letter.
"Trump got way ahead of himself," said Thomas Block, Washington policy strategist at Fundstrat Global Advisors. "From John Bolton to Mike Pompeo to the CIA: I think he's getting unified advice that this is premature. He loves doing things Obama couldn't do, so his gut was telling him to do it."
Trump's letter included a mix of both friendly and threatening language, including praise for North Korea's recent release of three American prisoners and a warning about the size of the U.S. nuclear arsenal.
"I think Trump got embarrassed and I think he's trying to dial back expectations. It's certainly disappointing to me, but I haven't written [the meeting] totally off yet," said Jack Ablin, chief investment officer at Cresset Wealth Advisors.
"I don't think investors would be blamed for thinking that this could go forward," he added. "It's all tied to a bunch of different things, including Chinese trade negotiations."
News of the cancellation came shortly after the Commerce Department said that it started an investigation into whether automobile imports "threaten to impair the national security" of the United States.
"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Commerce Secretary Wilbur Ross said in a statement Wednesday.
The Commerce Department said the investigation "will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States, including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies."
The possibility of additional import taxes isn't likely to help already stressed trade negotiations between the U.S. and countries like Japan, Germany and South Korea, all major participants in the international automobile market.
Japan's Nikkei 225 fell 1.1 percent while the Stoxx Europe 600 dropped 0.5 percent, with shares of BMW and Volkswagen each down more than 2 percent.
These broad trade statements from the White House "start with hyperbole and end with something people can accept," said JJ Kinahan, chief market strategist at TD Ameritrade. "There's a lack of volume as people start to head away for the weekend. It seems like just something to trade on."
Domestic online comparable sales growth slowed to 12 percent growth in the U.S. from a year ago, compared to 22.5 percent growth.
Best Buy's chief financial officer, Corie Barry, added that the company is not upgrading its full fiscal year outlook during the earnings conference call.
U.S. stocks finished slightly higher on Wednesday after the Federal Reserve announced it would be comfortable letting inflation temporarily run above its target.
Specifically, the minutes said "a temporary period of inflation modestly above 2 percent would be consistent with the Committee's symmetric inflation objective."
Though the general tone was that inflation would continue to rise, there was disagreement over how confident the Fed should be after undershooting its target for so long, with some members amenable to letting the prices climb higher.
All signs continued to point at a tight labor market, with Thursday's data on new applications for U.S. unemployment rising just slightly to 234,000 for the week ended May 19.
The moves in stocks were accompanied by purchases of safe haven assets like bonds and gold.
The yield on the benchmark 10-year Treasury note, which moves inversely with its price, fell below the key psychological level of 3 percent. Gold futures, meanwhile, settled at $1304.4 per ounce, up 1.15 percent on the day.
The dollar index, which tracks the dollar against a basket of other currencies, was down 0.25 percent at 93.77.