Asia Markets

Asia stocks fall as fresh trade concerns ramp up over EU tariffs

Key Points
  • Stocks in Asia fell on Thursday.
  • Worries over global trade tensions continue to weigh on investor sentiment. The U.S. is set to impose tariffs on European Union goods on October 18.
  • Markets across the globe have also been rattled in the last few sessions as worries grow over the prospect of an economic slowdown in the U.S.
  • Markets in China and South Korea were closed on Thursday for holidays.

Stocks in Asia fell on Thursday amid fresh trade concerns, with the U.S. announcing it's set to slap tariffs on European Union goods.

The Nikkei 225 in Japan fell 2.01% to close at 21,341.74, with shares of index heavyweights Fast Retailing, Softbank Group and Fanuc all dropping at least 2% each. The Topix index also slipped 1.72% to finish its trading day at 1,568.87.

The Nikkei 225 in Japan fell 2.01% to close at 21,341.74, with shares of index heavyweights Fast Retailing, Softbank Group and Fanuc all dropping at least 2% each. The Topix index also slipped 1.72% to finish its trading day at 1,568.87.

Over in Australia, the S&P/ASX 200 dropped 2.21% to close at 6,493.00 as most sectors saw declines. The heavily-weighted financial subindex fell 2.61%, with shares of the country's so-called Big Four banks seeing declines: Australia and New Zealand Banking Group slipped 2.67%, Commonwealth Bank of Australia shed 2.84%, Westpac fell 2.43% and National Australia Bank dropped 3.51%.

Hong Kong's Hang Seng index bucked the overall trend regionally as it rose 0.26% to close at 26,110.31. The turnaround came amid local media reports that authorities in the city are set to ban face masks at rallies through an emergency law.

Hong Kong retail sales in August plunged to its lowest on record, amid protracted protests in the city that have lasted for months. Shares of retailers were mixed on Thursday, with Chow Tai Fook Jewellery gaining 1.25% and Prada slipping 0.89% while Sa Sa International surged 4.12%.

Overall, the MSCI Asia ex-Japan index was 0.4% lower.

Markets in China and South Korea were closed on Thursday for holidays.

Renewed trade fears

Fears that a new battle on the trade front could rattle markets again, as the Office of the U.S. Trade Representative said it will impose tariffs on European Union goods on October 18.

"It is hard not to see that the timing and context of the ruling — in the midst of broad-based US offensive on all trading partners ... is tragic; and almost certainly in danger of blowing global trade even more off-course," Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note.

"It would appear that the WTO will inadvertently find itself being complicit in blowing global trade off course; further eroding its moral authority (assuming there was any to begin with), and endangering its own relevance," Varathan said.

That comes on top of the ongoing trade war between Beijing and Washington, with Chinese and U.S. officials scheduled to meet in Washington next week. The tariff fight between the two largest economies has lasted for more than a year with seemingly no end in sight.

Worries have also grown over the prospect of an economic slowdown in the U.S. Manufacturing activity in the U.S. contracted to its worst level in more than a decade, according to a Tuesday report from the Institute for Supply Management (ISM). A September private payrolls report also showed a slowing pace of U.S. hiring.

Overnight stateside, the Dow Jones Industrial Average plunged 494.42 points to close at 26,078.68. The S&P 500 shed 1.8% to end its trading day on Wall Street at 2,887.61 while the Nasdaq Composite closed 1.6% lower at 7,785.25.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 99.151 after touching an earlier low of 98.975.

The Japanese yen traded at 107.22 per dollar after seeing an earlier high of 106.95. The Australian dollar changed hands at $0.6710 after bouncing from levels below $0.67 yesterday.

Oil prices slipped in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 0.23% to $57.56 per barrel. U.S. crude futures also declined fractionally to $52.59 per barrel.

— Reuters, along with CNBC's Fred Imbert, Jacob Pramuk and Kayla Tausche, contributed to this report.