Asia Markets

Most major Asian markets lower; shares of SMIC in Hong Kong tumble as U.S.-China tech tensions rise

Key Points
  • Hong Kong-listed shares of China's largest chip manufacturer, Semiconductor Manufacturing International Corporation, plunged nearly 23% on Monday.
  • U.S. President Donald Trump's administration is considering imposing export restrictions on SMIC, according to a Defense Department spokesperson.
  • Data from China's General Administration of Customs showed Monday that the country's dollar-denominated exports rose 9.5% from a year ago while imports declined 2.1% in the same period.

SINGAPORE — Asia-Pacific markets were mixed on Monday, as investors reacted to rising tech tensions between Washington and Beijing.

Mainland Chinese stocks led losses among the region's major markets on the day, with the Shanghai composite down 1.87% to about 3,292.59 while the Shenzhen component dropped 2.729% to around 13,284.03. Hong Kong's Hang Seng index closed 0.43% lower at 24,589.65.

Hong Kong-listed shares of Semiconductor Manufacturing International Corporation (SMIC), China's largest chip manufacturer, plunged 22.88% on Monday. The Hang Seng Tech index also dropped 4.57% on the day to 7.240.96. It came after a U.S. Defense Department spokesperson said President Donald Trump's administration is considering imposing export restrictions on SMIC

SMIC is seen as an important player in China's ambition to grow its domestic semiconductor industry. The potential move by Washington, first reported by Reuters, would mark a major escalation in the tech battle between the U.S. and China.

In Japan, the Nikkei 225 closed 0.5% lower at 23,089.95 while the Topix index shed 0.42% to end its trading day at 1,609.74. South Korea bucked the trend, with the Kospi gaining 0.67% to close at 2,384.22. Australia's S&P/ASX 200 also closed 0.33% higher at 5,944.80.

Overall, the MSCI Asia ex-Japan index was 0.26% lower.

Meanwhile, data from China's General Administration of Customs showed Monday that the country's dollar-denominated exports rose 9.5% from a year ago while imports declined 2.1% in the same period.

Economists in a Reuters poll had expected a 7.1% rise in the August export figure from a year ago, while imports were forecast to edge 0.1% higher in the same period.

"We expect export growth to stay robust in the rest of the year as the global economy recovers," economists at Oxford Economics wrote in a note referring to China's latest trade data. "We anticipate a record-breaking surge of global growth on the quarter in Q3 due to eased lockdown restrictions, followed by solid, albeit slower, growth in Q4. This bodes well for China's exports outlook."

Still, the economists warned of challenges to the export outlook as other major economies are "facing headwinds amid difficulties to fully contain Covid-19."

Oil prices slip

Oil prices slipped in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 1.55% to $41.99 per barrel. U.S. crude futures declined 1.68% to $39.10 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.826 after its ascent last week from levels below 92.0.

The Japanese yen traded at 106.12 per dollar after weakening last week from levels below 105.6 against the greenback. The Australian dollar changed hands at $0.7281 after last week's slip from levels above $0.732.