Asian stocks tentative as Hikvison news overshadows Huawei reprieve
- Asian stocks are struggling to cheer the overnight gains in the US stocks, due to trade tensions.
- Shanghai Composite is flatlined, Nikkie is up 0.28%.
Asian stocks are lacking a clear directional bias this Wednesday morning, despite the overnight gains in the US stocks, possibly due to reports that the Trump administration is considering blacklisting Hikvison - a major Chinese surveillance technology firm.
MSCI's broadest index of Asia-Pacific shares outside Japan is currently reporting marginal losses, having edged up in early trade following gains on Wall Street.
Shares in Australia are down 0.14%, South Korea's Kospi is reporting a 0.20% drop and the Shanghai Composite is trading largely unchanged on the day. Meanwhile, Hang Seng and Nikkei are up 0.14% and 0.28%, respectively.
The major US indices rallied on Tuesday with technology shares leading the way after Washington eased curbs on Huawei. The US chipmaker stocks supplying to China's Huawei had taken a hit last week due to the decision by the Trump administration to block Huawei Technologies Co Ltd from buying US goods.
So far, however, the rally in the US stocks has not had a positive impact on the Asian markets. This is because The New York Times reported earlier today that the US may blacklist China's Hikvison - one of the world’s largest manufacturers of video surveillance products. That could only lead to further escalation of trade tensions between the world's two biggest economies.
That said, the stocks may pick up a bid if the Chinese yuan shows signs of life. That would imply the trade war fears have peaked. As of writing, the USD/CNH pair is trading at 6.9050.
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
