People walk past a bank electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Wednesday, July 4, 2018. Asian shares were moderately lower on Wednesday after U.S. stocks succumbed to a sell-off in the final minutes of trading, snapping a three-day winning streak. (AP Photo/Vincent Yu)

Asian shares mostly lower as China-US tariffs moves loom

July 04, 2018 - 4:30 am

BANGKOK (AP) — World shares were mostly lower on Wednesday as European shares tracked losses in Asia and on Wall Street, where tech shares were hit by worries over trade tensions between Beijing and Washington.

KEEPING SCORE: Germany's DAX lost 0.4 percent to 12,306.49 and the CAC 40 of France lost 0.1 percent to 5,311.06. Britain's FTSE 100 slipped 0.2 percent to 7,579.87. But S&P 500 futures added 0.2 percent and Dow futures were up 0.1 percent.

ASIA'S DAY: Japan's Nikkei 225 index fell 0.3 percent to 21,717.04 and the Shanghai Composite index dropped 0.1 percent to 2,759.13. Hong Kong's Hang Seng index fell 1.1 percent to 28,241.67 and the Kospi in South Korea lost 0.2 percent to 2,265.46. Australia's S&P ASX/200 gave up 0.4 percent to 6,183.40. Shares rose in Southeast Asia and Taiwan.

CHINA-U.S. TRADE: On Friday the U.S. is set to impose a 25 percent tariff on $34 billion worth of Chinese imports. And China is expected to strike back with tariffs on a similar amount of U.S. exports. The big question is how far the two countries will go in their dispute over trade. The Trump administration has said it won't target an additional $16 billion worth of Chinese goods until it gathers further public comments. It's also identifying an additional $200 billion in Chinese goods for 10 percent tariffs, which could take effect if Beijing retaliates.

EUROPE-TRADE: German Chancellor Angela Merkel said Tuesday the European Union will strive to avoid a trade war with the United States. But Washington needs to join in that effort, Merkel said. President Donald Trump's administration has imposed tariffs on EU steel and aluminum imports and is mulling whether to add tariffs on cars, trucks and auto parts.

CHINESE CURRENCY: Reported comments by the head of China's central bank saying he's closely watching the recent slide in the value of the yuan, also known as the renminbi (RMB), against the U.S. dollar have helped to reassure investors. People's Bank of China Gov. Yi Gang said financial risks were under control and the China's international balance of payments and currency flows were stable.

ANALYST VIEWPOINT: "The statement puts paid to any fears that the PBOC could be engineering a depreciation to cushion the economy, as Yi Gang stakes his credibility on the RMB being stable within the bounds of broad USD volatility," Chang Weiliang of Mizuho Bank said in a commentary. The yuan ended trading Wednesday at 6.66 to the dollar.

ENERGY: Benchmark U.S. crude fell back, losing 38 cents to $73.76 per barrel in electronic trading on the New York Mercantile Exchange. It added 20 cents to $74.14 a barrel on Tuesday, reaching more than $75 a barrel in early trading. Brent crude, used to price international oils, rose 21 cents to $77.97 per barrel.

CURRENCIES: The dollar fell to 110.51 yen from 110.59 yen on Tuesday. The euro dropped to $1.1641 from $1.1657.

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