The major Asia-Pacific stock indexes are trading mixed early Monday as investors remained cautious over heightened U.S.-China tensions in recent weeks. Worries over flaring tensions between the two economic powerhouses weighed on risk sentiment although a recovery in industrial activity in the world’s second-largest economy capped losses. Nonetheless, ranges remained tight on Monday.
At 03:30 GMT, Japan’s Nikkei 225 Index is trading 22329.94, down 88.21 or -0.39%. Hong Kong’s Hang Seng Index is at 24429.96, down 102.66 or -0.42% and South Korea’s KOSPI Index is at 2373.37, up 21.70 or -0.92%.
In China, the Shanghai Index is trading 3367.01, up 12.97 or +0.39% and Australia’s S&P/ASX 200 Index is at 6085.50, up 80.70 or 1.34%.
Trading is expected to be on the light side with Japanese markets closed for public holidays.
US-China Relations Remain at Forefront
The latest round of concerns was fueled late last week when U.S. President Donald Trump signed two executive orders banning WeChat, owned by Chinese tech giant Tencent, and TikTok in 45 days’ time while announcing sanctions on 11 Chinese and Hong Kong officials.
Additionally, U.S. regulators recommended that overseas firms listed on American exchanges be subject to U.S. public audit reviews from 2022.
In less than a week, traders could feel more grief if the latest moves by the Trump administration jeopardize the U.S.-China trade talks scheduled for August 15. Finally, there is always the possibility of Chinese retaliation to these moves.
“The running assumption in markets has been President Trump needed the phase one deal to succeed, as much as China, this side of the November elections… At the same time President Trump is running a hard China line into the elections,” Tapas Strickland, director of markets & economics at National Australia Bank said.
TikTok suing Trump Administration Over Ban as Soon as Tuesday: Report
Social media giant TikTok is planning to sue the Trump administration as soon as Tuesday over its planned ban of the app in the United States, according to an NPR report.
TikTok declined to comment on a potential lawsuit, but the company has said that it will do whatever is possible to ensure that TikTok is treated fairly.
“We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the U.S. Courts,” TikTok said in a statement.
NPR reports that the lawsuit will argue the ban is unconstitutional and that its national security justification is baseless.
“TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories, the executive order reads. “This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.”
TikTok disputes this, and said Friday that it “has never shared user data with the Chinese government, nor censored content at its request.”
Why is this important to investors? According to Fox Business News, “Multiple American companies, including Microsoft, Google, and Facebook, have expressed interest in buying TikTok. President Trump has insisted that the U.S. Treasury get a cut of whatever deal is made, which could complicate the negotiations.”
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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