Asia Markets

Asia markets decline amid US political uncertainty

Key Points
  • Asia markets slipped on Wednesday as investors watched for developments in the United States after House Speaker Nancy Pelosi announced a formal impeachment inquiry into President Donald Trump.
  • Tuesday's announcement came following reports about a call Trump had earlier this year with Ukraine's leader, Volodymyr Zelensky.
  • Just three American presidents before Trump have faced serious impeachment proceedings, but Congress has never booted one from the White House.

Asia markets slipped on Wednesday as investors watched for developments in the United States after lawmakers launched an impeachment inquiry into President Donald Trump.

Mainland Chinese stocks slipped on the day, with the Shanghai composite down 1% to about 2,955.43 and Shenzhen component declining 1.43% to 9,671.06. The Shenzhen composite shed 1.608% to around 1,638.77.

Hong Kong's Hang Seng index also fell 1.27%, as of its final hour of trading.

In Japan, the Nikkei 225 closed 0.36% lower at 22,020.15 as shares of index heavyweights Softbank Group and Fanuc fell 2.29% and 2.99%, respectively. The Topix index also declined 0.18% to finish its trading day at 1,620.08.

Over in South Korea, the Kospi shed 1.32% to close at 2,073.39. Australia's S&P/ASX 200 also ended its trading day 0.57% lower at 6,710.20.

The MSCI Asia ex-Japan index traded 0.9% lower.

U.S. House Speaker Nancy Pelosi announced the inquiry after meeting with key leaders in the House committee and the Democratic leadership team.

Tuesday's announcement came after reports about a phone call earlier this year between Trump and Ukraine's leader, Volodymyr Zelensky. The U.S. president allegedly pressured Zelensky to investigate Democratic presidential hopeful Joe Biden's family. Trump said on Tuesday he would release the full transcript of the controversial call.

Just three American presidents before Trump have faced serious impeachment proceedings, but Congress has never booted one from the White House. Even if Democrats eventually impeach Trump, the Republican-held Senate may never find him guilty and remove him from office.

As of Wednesday morning stateside, futures pointed to a muted open for stocks on Wall Street at Wednesday's open.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.555 after slipping from levels around 98.700 yesterday.

On the trade front, Trump said Tuesday that he will not accept a "bad deal" with Beijing, ahead of negotiations between the two largest economies of the world set to take place in the coming weeks. Chinese Foreign Minister and State Councilor Wang Yi said Beijing expects Washington to "remove all unreasonable restrictions."

"I would like to see a trade deal but I'm very skeptical despite the macro backdrop in China which is very, very soft," Sam Le Cornu, CEO and co-founder of Stonehorn Global Partners, told CNBC's "Squawk Box" on Wednesday.

"At the moment it's one of the most difficult periods, I think, to ... try to predict in terms of where markets (are) going," Le Cornu said.

The U.S. and China since last year have applied tariffs on billions of dollars worth of each other's goods, which has roiled global markets, created uncertainty and dampened economic growth outlooks around the world.

Meanwhile, the Reserve Bank of New Zealand kept its cash rate on hold at 1%, following a larger-than-expected rate cut in August. In a media release, the New Zealand central bank said "there remains scope for more fiscal and monetary stimulus" if necessary.

The Bank of Thailand also kept its policy rate unchanged at 1.5%, with the central bank saying in its media release that it was "ready to use policy tools as appropriate."

Currencies and oil

The Japanese yen, often viewed as a safe-haven currency in times of uncertainty, traded at 107.30 against the dollar after strengthening from levels above 107.5 in the previous session.

The Australian dollar was at $0.6780 after seeing an earlier high of $0.6804.

Oil prices declined Wednesday afternoon during Asian trading hours, with international benchmark Brent crude futures slipping 1.16% to $62.37 per barrel. The U.S. crude futures contract also shed 0.94% to $56.75 per barrel.

— CNBC's Fred Imbert and Jacob Pramuk contributed to this report.