Asian stocks drop on trade concerns, potential double top on Nikkei

  • Asian stocks are flashing red following the overnight decline in the US equities. 
  • President Trump is planning to 'restore' tariffs on steel from Brazil and Argentina. 
  • Nikkei is likely creating a double top bearish reversal pattern on the daily chart. 

Asian stocks are reporting losses, tracking the overnight losses on Wall Street triggered by fresh tariffs announced by President Donald Trump.

At press time, Japan's Nikkei is trading at 2,330, representing a 200 point or a 0.9 % drop. The index seems to be charting a double top pattern with the neckline support of 22,727 on the daily chart.

Meanwhile, the Shanghai Composite is shedding 0.28% and shares in Australia are down close to 2%. Stocks in New Zealand, Hong Kong and South Korea are also flashing red.

The US stocks fell in the overnight trade with the Dow Jones Industrial Average slipping almost 1% on renewed trade tensions. President Trump on Monday said he will place tariffs on steel and aluminium imports from Brazil and Argentina.

Further, the disappointing US ISM manufacturing PMI likely added to the bearish tone around the equities. Treasury yields, however, remained resilient despite the risk-off tone in the markets. The 10-year yield traded flat lined around 1.82%, having gapped higher from Wednesday's close at 1.75%.

Currently, the futures on the S&P 500 are reporting a 0.11% gain. A US proposal for tariffs on $2.4 billion of French goods announced after the Wall Street close may continue to cap upside in equities on Tuesday.

Stocks in Australia could reverse course, if the Reserve Bank of Australia sounds dovish, reinforcing the best for additional rate cuts in 2020. The central bank is widely expected to keep rates unchanged at 0.75% on Tuesday. Many experts believe the RBA will hit the zero lower bound in 2020 and will be forced to implement unconventional policies like quantitative easing.



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD falls to three-week lows amid fresh USD strength

EUR/USD has resumed its falls and hit a new low under 1.11, the lowest since late December. The greenback continues enjoying last week's upbeat American figures. US markets are closed on Monday.


GBP/USD is struggling as Britain veers away from the EU on trade

GBP/USD is trading around 1.30, on the back foot. The UK may break EU rules after Brexit, complicating the economic picture for UK industry. Last week's UK data continues weighing on sterling.


Cryptos in search of fresh funds after tripping lower

XRP tests the bullish scenario and clings strongly to the upside. ETH/BTC consolidates in the bullish zone and prepares its ascent to the skies. Bitcoin and Ether move away from the combat zone in search of new upward forces.

Read more

WTI trims initial gains, back near $59.00

Prices of the barrel of the West Texas Intermediate (WTI) are trading on a firmer tone at the beginning of the week, managing to clinch tops in the vicinity of the key $60.00 mark.

Oil News

USD/JPY bounces from session lows confirming breakout on charts

USD/JPY is currently trading near 119.20, having found bids at 110.08 in early Asia. The bounce has confirmed a flag breakout on the 5-minute chart and opened the doors for 110.34. The bullish view would be invalidated if the spot finds acceptance below 110.15.