By Gina Lee
Investing.com – Asian stocks were down on Friday morning, ending the week on a low over the latest mounting of tensions between the U.S. and China.
U.S. President Donald Trump issued two executive orders earlier in the day banning U.S. transactions with ByteDance, owner of wildly popular video-sharing app TikTok, and Tencent, owner of the WeChat app, with stiff penalties for any U.S. resident or company engaging in any transactions with TikTok, WeChat, or their owners once the orders take effect in 45 days.
Trump’s move comes a day after Secretary of State Michael Pompeo urged U.S. businesses to remove the apps from their stores, and the President’s Working Group on Financial Markets panel recommended tighter disclosure requirements for Chinese companies listed on U.S. exchanges.
China’s Shanghai Composite fell 1.45% by 11:31 PM ET (4:31 AM GMT) and the Shenzhen Component was down 1.23%.
Elsewhere in the Greater China region, Hong Kong’s Hang Seng Index slid 2.28%.
Japan’s Nikkei 225 was down 0.83% and South Korea’s KOSPI fell 0.31%
Down Under, the ASX 200 was down 0.71%. The Reserve Bank of Australia issued a warning in its quarterly statement on monetary policy published earlier in the day that the latest lockdown in Melbourne could shave off at least two percentage points from the current quarter’s national growth.
Meanwhile, investor skepticism over the U.S. economic recovery continues to build, with the U.S. Congress still not close to reaching a consensus over the latest stimulus measures. Investors will see whether an agreement is reached before the end-of-the-week deadline later in the day, and before Trump acts on his pledge to issue an executive order if the deadline passes with no agreement.
“It is a possibility that we have a sort of buy the rumor, sell the news on fiscal policy,” Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, told Bloomberg.
“With a momentum driven market you have to naturally be a bit suspicious, particularly when it is very policy related.”