Weak manufacturing reports from Britain and the US prompted investors to seek out safe-haven assets (JEFF KOWALSKY)

Hong Kong (AFP) – Asian stocks largely fell Tuesday, reversing early gains on a bargain-hunting push by investors, as global trade tensions continued to weigh on markets.

Fears of an economic slowdown have mounted in recent days as US President Donald Trump has threatened Mexico with tariffs, adding to anxieties over the US-China trade war, which shows no signs of a resolution.

The market’s “assumption that the slowing global economy would recover later this year, bolstered by the (strong) US economy, has been shaken by the spread of trade frictions to other countries such as Mexico”, Okasan Online Securities said in a commentary.

Trump followed up his threats against Mexico last week with an announcement that Washington would withdraw preferential trade treatment to India, starting Wednesday, in a bid to press New Delhi to increase market access to US goods.

The US ISM manufacturing index released on Monday — and compiled prior to the recent tariff threats — highlights “the importance of doing business with Mexico”, OANDA senior market analyst Edward Moya said.

“Respondents noted they are shifting business from China to Mexico, and that ongoing tariffs are providing multiple strains in doing business,” Moya said.

Weak manufacturing reports from Britain and the United States prompted investors to seek safe-haven assets such as the yen, which in turn put pressure on Tokyo’s main index.

Less than 30 minutes after the opening bell, the Nikkei dipped into negative territory, ending the morning 0.4 percent lower.

Hong Kong fell 0.7 percent while Shanghai plunged 1.1 percent. Taipei lost 0.4 percent and Seoul inched down 0.1 percent. But Singapore edged up 0.1 percent while Sydney made modest gains of 0.2 percent.

– Tech stocks slump –

American tech giants sank Monday on reports that Washington planned to intensify its antitrust scrutiny of the sector.

The Wall Street Journal, citing unnamed sources, reported that the Justice Department and Federal Trade Commission had agreed to coordinate antitrust enforcement over tech companies, with Justice taking the lead on Google and the FTC handling Facebook and some aspects of Amazon.

The tech-rich Nasdaq Composite Index finished 1.6 percent lower, with Facebook plunging 7.5 percent and Google parent Alphabet sliding 6.1 percent.

But trade tensions remained the dominant issue on investors’ minds, extending a decline in oil prices.

Since Trump fired the first shot, China and the US have deployed tit-for-tat tariffs on two-way trade worth hundreds of billions of dollars.

The dispute has worsened in recent weeks, with the US blacklisting Chinese tech giant Huawei over national security concerns, and Beijing threatening to unveil its own list of “unreliable” foreign companies.

There are hopes that Trump and Chinese President Xi Jinping will meet at the G20 summit this month to jump-start stalled negotiations.

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: DOWN 0.4 percent at 20,325.02 (break)

Hong Kong – Hang Seng: DOWN 0.7 percent at 26,711.01

Shanghai – Composite: DOWN 1.1 percent at 2,857.73 

Pound/dollar: UP at $1.2667 from $1.2665 at 2100 GMT Monday

Euro/pound: UP at 88.84 pence from 88.77 pence 

Euro/dollar: UP at $1.1253 from $1.1242

Dollar/yen: DOWN at 108.01 yen from 108.07 yen 

Oil – Brent Crude: DOWN 25 cents at $61.03 per barrel

Oil – West Texas Intermediate: DOWN 11 cents at $53.14 per barrel

New York – Dow: UP less than 0.1 percent at 24,819.78 (close)

London – FTSE 100: UP 0.3 percent at 7,184.80 (close)

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.