Asian Stocks Mixed, Rebound From U.S. Tech Shares Tumble Continues

This post was originally published on this site – Asian stocks were mixed on Tuesday morning, with markets  cautiously continuing a rebound from the previous week’s U.S. technology shares selloff.

The shares, which have seen mammoth gains throughout the COVID-19 pandemic, due to doubts over positioning and stretched valuations.

But some investors remained unconvinced that the rebound signifies anything more than a correction.

“In the greater picture, the stock market correction looks just that, a correction,” Oanda APAC senior market analyst Jeffrey Halley told Bloomberg, but added that the underlying drivers of the so-called “buy everything” trade remain intact.

China’s Shanghai Composite was down 0.34% by 11:33 PM ET (4:33 AM GMT), reversing earlier gains. The Shenzhen Component fell 0.77%.

U.S. President Donald Trump stoked fresh tensions with China with his threat to decouple, or curb, the economic relationship between the two countries.

“So, when you mention the word decouple, it’s an interesting word … we lose billions of dollars and if we didn’t do business with them, we wouldn’t lose billions of dollars. It’s called decoupling, so you’ll start thinking about it,” Trump said during a White House news conference on Monday in which he also vowed to bring jobs back to the U.S. from China.

Trump’s comments echoed comments made in June by Treasury Secretary Steven Mnuchin, who threatened a decoupling of the U.S. and Chinese economies would result if China did not allow U.S. companies were not allowed to compete on a fair and level basis.

Meanwhile, Chinese tensions with India also mounted after renewed clashes between the two countries along a disputed border earlier in the week. China said Indian troops violated a bilateral agreement and fired warning shots in the air on Monday.

Chinese border guards taking “countermeasures” according to Zhang Shuili, spokesman for the People Liberation Army’s Western Theatre Command, said in a statement on Tuesday. But Zhang’s statement did not specify what countermeasures were taken, or whether Chinese troops also fired warning shots.

Hong Kong’s Hang Seng Index tumbled 0.80%.

Japan’s Nikkei 225 gained 0.45%, with hints of a snap election from Yoshihide Suga ahead of leadership elections scheduled for the following week. Suga is the favorite to succeed incumbent prime minister. Investors were also digesting mixed Japanese economic data released earlier in the day showing that GDP contracted 28.1% year-on-year during the second quarter, beating the predicted 28.6% drop but far below the previous quarter’s 2.2% fall. But July’s household spending year-on-year and the current account missed their forecasts.

South Korea’s KOSPI gained was up 0.46% and In Australia the ASX 200 rose 0.47%.

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