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Asian Stocks Mixed Over Latest U.S.-China Tensions
Published Aug 17, 2020 11:13PM ET
Updated Aug 17, 2020 11:19PM ET
© Reuters.
By Gina Lee
Investing.com – Asian stocks were mixed on Tuesday morning, with simmering U.S.-China tensions over the U.S.’ new restrictions on Huawei Technologies putting a damper on the U.S. markets’ tech-driven rally during the previous session.
The Commerce Department said on Monday that Huawei’s access to commercially available chips would be further restricted, with 38 Huawei affiliates in 21 countries added to an economic blacklist. The latest restrictions are in addition to those announced by the U.S. in May and will further limit the adoption of Huawei’s 5G technology. Huawei is heavily reliant on the chips for its 5G base stations and smartphones, with its current stockpile of some self-designed chips estimated to run out by nearly 2021.
The curbs are the latest cause of tension between the two countries, with U.S. President Donald Trump’s ban of the Tiktok and WeChat apps in the U.S., Hong Kong’s national security laws and Taiwan among the other causes.
Both Huawei and China have yet to respond to the move. But China’s Shanghai Composite was little changed, inching up 0.05% by 11:15 PM ET (4:15 AM GMT), while the Shenzhen Component edged lower to 0.15%.
The People's Bank of China is also set to release its loan prime rate on Thursday.
Meanwhile, investors are also looking to see whether the U.S. Congress will reach a consensus on the latest stimulus package. Both the Senate and the House of Representatives wrapped their sessions up during the previous week without reaching an agreement on the package, with the House not due to resume its session until September 14.
“A lot of investment professionals as well as retail investors are on the sidelines partially because they are waiting for this second stimulus package,” Erin Gibbs, president and chief investment officer at Gibbs Wealth Management, told Bloomberg.
“It’s not a full-on risk on environment just yet,” she added.
The U.S. Federal Reserve is also scheduled to release its minutes on Wednesday, which are widely expected to show the adoption of an average inflation target and likely to push inflation above 2% for some time.
Hong Kong’s Hang Seng Index edged up 0.17%.
Japan’s Nikkei 225 fell 0.50% and South Korea’s KOSPI was down 0.38% after returning from a holiday.
Down Under, the ASX 200 rose 0.55%. Victoria state reported the lowest daily rise in new COVID-19 cases in a month on Tuesday, raising cautious hopes of an ease in the country’s second wave of infections.
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