Asia report: Most markets fall as trade tensions linger

(Sharecast News) - Asia-Pacific equities fell on Tuesday as investors digested geopolitical tensions, trade reprisals and sharp moves in the technology sector.

Losses across Japan, China and South Korea outweighed modest gains in Australia.

"US equity futures took a hit, while Asian stocks extended their slide amidst fresh trade-war tensions," said Patrick Munnelly, market strategy partner at TickMill.

"The yen strengthened, as cryptocurrency prices continued their decline; Bitcoin's modest rebound following Friday's historic crypto crash has reversed overnight and did little to soften the blow of a staggering $20bn wipeout of leveraged bets, leaving parts of the market paralysed."

He added that "S&P 500 futures dropped 0.75%, with Nasdaq 100 futures slipping 0.95%, following China's latest retaliatory move against the US by slapping tariffs on American subsidiaries of Hanwha Ocean. Asian markets weren't spared either, tumbling 1.1%, as Japan's Nikkei 225 plunged 2.8%".

Most markets fall as trade tensions linger

In Japan, the Nikkei 225 slumped 2.68% to 46,799.50, extending its recent declines, while the broader Topix dropped 1.99% to 3,133.99.

Losses were led by technology and industrial names, with Furukawa Electric down 7.47%, Chugai Pharmaceutical off 6.4% and SoftBank Group sliding 6.14% after reports that its chip-design arm Arm was working with OpenAI on a deal involving Broadcom.

The news followed Monday's confirmation that OpenAI and Broadcom would jointly develop and deploy 10 gigawatts of AI accelerators starting next year.

Mainland Chinese shares also retreated, weighed down by heavy losses in semiconductor stocks.

The Shanghai Composite shed 0.62% to 3,865.23, while the Shenzhen Component fell 2.54% to 12,895.11.

Shares of Wingtech Technology plunged 9.99%, hitting the daily limit for a second straight session after the Dutch government took control of its Netherlands-based subsidiary Nexperia under the Goods Availability Act.

The move was aimed at safeguarding Europe's chip supply chains.

Munnelly noted that "amidst the back-and-forth, China and the US have been engaging in discussions through their economic and trade consultation framework.

"Working-level meetings reportedly took place on Monday, as confirmed by China's commerce ministry.

"US Treasury secretary Bessent expressed optimism that Trump and Xi Jinping could still meet, though he cautioned that the US is keeping all options open for responding to China's plans to limit rare earth exports."

He added that "China clarified that its export controls on rare earths and similar products are not intended to block exports entirely.

"Applications meeting the necessary criteria will continue to be processed, ensuring compliance with regulations while maintaining trade flow."

Other major decliners included Hubei Zhenhua Chemical, down 9.97%, and Jiangsu Xinquan Automotive Trim, off 9.14%.

In Hong Kong, the Hang Seng Index dropped 1.73% to 25,441.35, with losses led by technology and healthcare stocks.

SMIC fell 8.48%, CSPC Pharmaceutical Group lost 7.08%, and Kuaishou Technology slipped 6.77%.

South Korean markets reversed early gains, with the Kospi 100 down 1% at 3,759.95.

LG Energy Solution gained almost 7% after projecting a 34% rise in third-quarter operating profit, buoyed by US electric vehicle demand, but Samsung Electronics fell 1.82% despite forecasting a 32% year-on-year profit jump to about KRW 12.1trn (�6.4bn).

Hanwha Ocean declined 5.76% after China sanctioned five US-related units of Hanwha Marine Corporation in retaliation for US probes into China's maritime and shipbuilding sectors.

In Australia, the S&P/ASX 200 edged up 0.19% to 8,899.40, supported by strength in mining and energy shares.

Iluka Resources jumped 15.76%, Paladin Energy gained 9.57%, and Liontown Resources rose 6.93%.

New Zealand's S&P/NZX 50 index slipped 0.56% to 13,276.99, weighed by property stocks, with Precinct Properties down 6.77%, Property for Industry off 3.97%, and Kiwi Property Group lower by 3.2%.

In currency markets, the yen strengthened slightly, with the dollar down 0.12% at JPY 152.09, while the greenback advanced 0.96% against the Australian dollar to AUD 1.5497 and gained 0.64% on the New Zealand dollar to NZD 1.7578.

"The yen made a comeback, reversing earlier losses against the dollar," said Munnelly.

"Precious metals shined brightly, with silver soaring to a record-breaking high above $52.50 and gold also setting new highs.

"Treasury yields trimmed earlier gains, with the benchmark 10-year yield sitting at 4.04%."

Oil prices extended their recent losses, with Brent crude futures last down 2.16% on ICE at $61.95 per barrel, and the NYMEX quote for West Texas Intermediate off 2.19% at $58.19.

RBA sees no need for change, Singapore stands pat on policy

In economic news, the Reserve Bank of Australia judged it appropriate to keep interest rates on hold at its September meeting, with minutes released Tuesday showing policymakers saw no need for an immediate change in policy.

The board said that while monetary settings remained somewhat restrictive, the full effects of previous easing were still filtering through the economy, reflected in rising house prices and stronger credit growth.

Members noted that the August rate cut had lowered bank funding costs and reduced lending and mortgage rates, easing financial conditions broadly in line with past cycles.

Risks to the outlook were seen as balanced, with stronger consumption and capacity pressures offset by weak confidence, soft labour demand, and slowing wage growth.

The board reiterated that future moves would remain cautious and data-dependent.

Elsewhere, Singapore's central bank also left policy settings unchanged, maintaining the current rate of appreciation of its exchange-rate based policy band.

The Monetary Authority of Singapore said economic growth had proved stronger than expected, with the output gap likely to remain positive through 2025 before stabilising around zero next year.

It came alongside preliminary data showing third-quarter GDP growth of 2.9% year on year, beating forecasts of 1.9%.

The MAS said updated growth projections for 2025 and 2026 would be released in November.

Singapore, which conducts monetary policy through its currency rather than interest rates, last adjusted its policy stance in April and January before holding steady at its July review.

Reporting by Josh White for Sharecast.com.