Asia | Asia Stocks at the opening: Asia stocks tumble, Nikkei falls 2.6%

Eustance Huang

4 minutes

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Asia markets traded lower Tuesday morning as the U.S.-China trade war intensified, after Beijing confirmed it is suspending agricultural product purchases in response to new American tariffs.
President Donald Trump said last week the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.
In Japan, the Nikkei 225 plunged 2.61% in early trade, as shares of index heavyweight and robot maker Fanuc declined 3.69%. The Topix index also fell nearly 2.4%.
South Korea’s Kospi dropped 1.6%, as chipmaker SK Hynix saw its stock drop 2.92%. Australia’s S&P/ASX 200 slipped 2.48%.
The MSCI Asia ex-Japan index declined 0.76%.
The Tuesday session in Asia followed overnight declines on Wall Street, where the Dow Jones Industrial Average plunged more than 700 points, the S&P 500 dropped nearly 3% and the Nasdaq Composite fell 3.5%. It was the worst percentage drop for all three indexes this year.

Chinese response

The Chinese Ministry of Commerce said Chinese companies have stopped purchasing American agricultural products in response to Trump’s latest salvo and added it would “not rule out” tariffs on newly purchased agricultural goods after Aug. 3. For its part, China is one of the largest buyers of U.S. agriculture.
Investors will be closely watching for where the People’s Bank of China sets its midpoint for the onshore yuan today.
The Chinese central bank sets a daily rate for the currency, allowing it to trade in a band against the greenback within 2% of the midpoint value, also known as the onshore yuan. Its offshore counterpart is used by foreign investors and banks.
“The (midpoint) fix is likely to be below 7.0900,” Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia, wrote in a morning note.
The offshore yuan was last at 7.1268 against the greenback.
On Monday, the onshore Chinese currency weakened past the psychologically important 7-yuan-per-dollar threshold for the first time since 2008. Following that, the U.S. Treasury Department designated China as currency manipulator — a move that no White House had exercised since the Clinton administration.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.234 after declining from levels around 98.0 yesterday.
The Japanese yen, widely viewed as a safe-haven currency, traded at 105.70 after strengthening from levels above 106 in the previous session. The Australian dollar changed hands at $0.6770 after falling from levels above $0.678 yesterday.
Elsewhere, shares of Apple suppliers will also be in focus, with the Cupertino-based tech giant seeing its stock drop 5.2% on Monday amid the trade turmoil.
U.S. futures on Monday evening also pointed to further declines for stocks on Wall Street when they open later Tuesday, with the Dow implied to open lower by more than 400 points.

Asia-Pacific Market Indexes Chart

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE
NIKKEI	Nikkei 225 Index	NIKKEI	20202.58	-517.71	-2.50
HSI	Hang Seng Index	HSI	26151.32	0.00	0.00
ASX 200	S&P/ASX 200	ASX 200	6474.10	-166.20	-2.50
SHANGHAI	Shanghai	SHANGHAI	2821.47	-0.03	0.00
KOSPI	KOSPI Index	KOSPI	1912.19	-34.79	-1.79
CNBC 100	CNBC 100 ASIA IDX	CNBC 100	7598.39	-110.08	-1.43

Here is a look at some of the data ahead:

• Australia: Reserve Bank of Australia interest rate decision at 12:30 p.m. HK/SIN

— CNBC’s Patti Domm and Fred Imbert contributed to this report.

Source: CNBC