Asian shares slide on trade fears after Cohn resignation

  • Markets in Asia closed lower in choppy Wednesday trade following news of White House chief economic advisor Gary Cohn's resignation.
  • The dollar slid against the yen on the news and U.S. stock futures pointed to a lower opening.
  • South Korea said North Korea was open to talks with the U.S. on denuclearization.
  • Oil prices moved in the same direction as stocks.

Asian markets closed lower in choppy Wednesday trade following news that a top Trump economic advisor had resigned.

The Nikkei 225 slipped 0.77 percent, or 165.04 points, to close at 21,252.72. The index had pared losses of around 1 percent earlier in the day to hover around the flat line, before sliding once again.

The iron and steel sector, which would likely be affected if recently announced tariffs were implemented by the Trump administration, fell by 2.12 percent.

South Korea's Kospi shed 0.4 percent to close at 2,401.82 after notching gains earlier in the day. Despite the broader sentiment in the market, heavyweight Samsung Electronics advanced 3.4 percent and SK Hynix edged up 0.36 percent.

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Overnight news that North Korea was open to talks with the U.S. on denuclearization was also in focus as stocks with exposure to North Korea jumped. Shinwon, which Reuters said formerly managed factories in the Kaesong industrialized zone, surged 21.81 percent.

The Hang Seng Index lost 1.15 percent by 3:00 p.m. HK/SIN, but held above the 30,000 mark. Mainland markets closed mixed: The Shanghai composite edged down 0.55 percent to end at 3,271.46 and the Shenzhen composite traded lower by 0.78 percent.

Down Under, the S&P/ASX 200 declined 1.01 percent to end at 5,902. All of the benchmark's sub-indexes finished the day in the red, with the exception of gold producer stocks, which rose 1.49 percent. The heavily weighted financials sub-index lost 1.13 percent as Australia's "Big Four" banking stocks edged down.

Trade concerns back in focus

Trade fears, which had eased slightly in recent sessions, were in focus after White House chief economic advisor Gary Cohn resigned from the Trump administration on Tuesday.

While Cohn's departure date has not been announced, the development came after Trump's announcement last week that tariffs of 25 percent and 10 percent would be implemented on steel and aluminum imports, respectively. Cohn, a free trade advocate, had been against the tariffs.

The dollar slid against the safe-haven yen on the news, fetching 105.54 at 2:40 p.m. HK/SIN, after falling as low as 105.43 earlier and compared to the 106.1 handle seen at the end of the New York session.

Against the Swiss franc, which is also seen as a safe haven currency, the greenback declined to trade at $0.9365, compared to levels around the $0.94 handle seen in the last session. The dollar index, which tracks the U.S. currency against a basket of six rivals, slipped around 0.2 percent to 89.425.

The SPDR S&P 500 ETF Trust also fell 1.5 percent while U.S. stock index futures traded lower. Dow Jones industrial average futures were down 419 points during Asia afternoon trade.

Following Trump's threat that European Union car taxes could be taxed after the bloc said it would not sit idly by U.S. tariffs, one expert cautioned that tensions could continue to simmer.

"It won't end there. It is not hard to characterize current market behavior as complacent," wrote ING Chief Economist Robert Carnell in a note.

In corporate news, Japan's Kobe Steel on Tuesday said CEO Hiroya Kawasaki would resign on April 1 following a data falsification scandal. Shares of Kobe Steel were down 7.39 percent, under-performing the broader index.

Despite the broader declines seen in greater China markets, banking stocks listed on the mainland got a boost after Reuters reported on Tuesday that regulators intended to cut the proportion of funds required to cover bad debt. China Construction Bank finished the day up 1.85 percent and Industrial and Commercial Bank of China advanced 1.37 percent.

On the commodities front, oil prices moved in the same direction as stocks. U.S. crude futures lost 0.86 percent to trade at $62.06 per barrel and Brent crude futures were down 0.85 percent at $65.23.