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=ASIA MARKETS: Sino-US Trade Worries Drag Nikkei Asia300 Lower For Second Week

HONG KONG (Jun 22) -- Asian stocks outside of Japan edged higher on Friday but declined for the week, as the threat of a full-fledged trade war between the U.S. and China and its potential global economic impact worried investors.

The Nikkei Asia300 Index added 0.5% to 1,345.11 on Friday, but fell 2.9% for the week. Risk appetite was shaky after U.S. President Donald Trump last week announced import tariffs on $50 billion of Chinese goods, prompting a similar retaliatory move by Beijing. The duties are expected to be levied July 6 onward. Trump on Monday followed it up with a warning of tariffs on $200 billion worth of Chinese goods.

“So far the bulk of the tariffs are just proposed, so there is still room for a negotiated solution,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote in a note. “But there is now a high risk that some of the tariffs go into force before a negotiated solution is reached (which would be a short-lived negative for share markets), even though we still see the risk of a full-blown US-China trade war with deeper share market downside as being low at around a 10%-20% probability.”

Regional technology heavyweights Tencent Holdings and Samsung Electronics ended the week lower, weighing on the Asia300 gauge. Tencent lost 3.1% since last Friday, logging its worst weekly loss since March, while Samsung shed 0.8%, its fourth consecutive weekly decline. Hong Kong-listed Tencent rose 0.2% on Friday and Samsung added 0.4% in Seoul.

Chinese telecommunications-equipment maker ZTE shed 9.5% in Hong Kong this week, adding to a near 50% slump last week, as it resumed trading following a near two-month halt. The company’s shares rose 1.4% on Friday.

On Friday, energy producers listed in Hong Kong extended losses after crude oil prices dropped overnight. CNOOC and PetroChina fell 0.8% and 1%, respectively.

Pharmaceutical company Celltrion climbed 1.2% in Seoul on Friday. The company said it signed a contract worth 144.5 billion won ($130.3 million) with Celltrion Healthcare to provide biosimilar antibody drugs.

Hon Hai Precision Industry or Foxconn fell 0.5% in Taipei. The contract chipmaker on Friday said the biggest challenge facing the company currently was the trade war between the U.S. and China.

Sapura Energy jumped 7.5% in Kuala Lumpur. On Thursday, the company said its unit Sapura Fabrication was awarded nine contracts worth 1.8 billion ringgit ($449.8 million).

Malaysia’s King on Friday approved the appointment of Nor Shamsiah Mohd Yunus as the new governor of the central bank, a palace official said. The move marks her return to helm an institution which she left in 2016 after 30 years of service.

Nor Shamsiah, once a deputy governor at Bank Negara Malaysia, was last employed with the International Monetary Fund.

- By V. Phani Kumar;; +852 39605150
- Edited by Suzannah Benjamin
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- Copyright (c) 2018 Nikkei NewsRise Asia Pte Ltd.