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Asian shares fall after U.S. blacklists China's Huawei By Reuters

© Reuters. FILE PHOTO: Market prices are reflected in a glass window at the TSE in Tokyo

By Hideyuki Sano and Daniel Leussink

TOKYO (Reuters) – Asian shares fall on Thursday after the United States hit Chinese telecoms giant Huawei with severe sanctions , threatening

to further strain Sino-US trade ties.

MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.2%, hovering not far its lowest since late January

Japan's dropped 0.6%, with banks hurt by weak earnings, while South Korean shares also lost 0.6% and Chinese blue chips were down 0.2%.

Asian shares had steadied in early trade on news that US President Donald Trump was planning to delay tariffs on car imports, providing much needed relief to markets hit by a flare-up in trade tensions and weak US. and Chinese economic data

Bucking the downtrend, Australian stocks are steady as-expected-local job data supported expectations for a central bank rate cute

The U.S. Commerce Department said late on Wednesday it was adding Huawei Technologies Co Ltd and 70 affiliates to its "Entity List" ̵

1; a move that goes to the company from acquiring components and technology from U.S. firms without government approval.

"There has been an increasing disconnect between Asian markets and US markets over the last six months," said Nick Twidale, chief operating officer at Rakuten Securities Australia in Sydney.

"US markets were buoyed on President Trump possibly pulling back on car tariffs on both Europe and Japan, but really Asian markets have latched on the fact that he's not letting up in the trade war against China, "added.

On Wednesday, Wall Street shares extended a rebound, with the gaining 0.58% and the MSCI's broadest gauge of world stocks bouncing back from a two-month low hit on Tuesday. ()

Also on Wednesday, more than a week after Washington, higher tariffs were imposed on $ 250 billion imports from China, Treasury Secretary Steven Mnuchin said he will probably travel to Beijing soon to continue trade negotiations with Chinese counterparts.

China reported surprisingly growth in retail sales and industrial output for April, with overall retail sales posting the slowest increase since May 2003.

In the United States, retail sales unexpectedly fell in April as households back on purchases of motor vehicles and a range of other goods, while industrial production fell 0.5% in April, the third drop this year


Weak data underpinned US bond prices, pushing down yields further.

The 10-year U.S. Yields eased to 2.371%, near its 15-month low of 2.340% touched on March 28.

The two-year notes yield a 15-month low of 2,139% on Wednesday and last stood at 2.1616%. [19659004] Fed funds rate futures are fully priced at a rate cut by the end of this year and more than a 50 percent chance of a move by September.

"The markets are step by step in pricing in a rate cut. is a sea change from a year ago when the consensus was three to four rate hikes a year, "said Akira Takei, bond fund manager at Asset Management One.

In the foreign exchange market, the Australian dollar brushed its lowest since early January 16, 2010, 06:29 PM "19589004" "The central bank may be forced to lower rates soon to stimulate the economy. "said Rakuten's Twidale.

" Expectations now will be rising that we are to get a cut in June or in the (Reserve Bank of Australia) meeting after that. "Against the yen, the dollar dipped in tenth of a percent to 109.49.

The euro rose 0.1% to $ 1.1208.

Oil prices gained on the prospect of mounting tensions in Middle East hitting global supplies despite an unexpected build in inventories.

rose 0.5% to $ 72.10 a barrel, while U.S. West Texas Intermediate (WTI) crude fetched $ 62.35, also half a percent higher.

The United States pulled staff from its embassy in Baghdad on Wednesday out of apparent concern about perceived threats from Iran.

The sabotage of the tankers, for which no one has claimed responsibility, and Saudi Arabia's announcement on Tuesday that armed with two of its oil pumping stations have raised concerns Washington and Tehran may be moving towards conflict.

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