Asian markets were down Wednesday, though Hong Kong recovered slightly from an earlier tumble, as trade tensions between the US and China continued to weigh on investor sentiment.
Wall Street ended the session down in a shortened trading day ahead of Wednesday’s Independence Day holiday, with falls in tech stocks pressuring the market.
Concerns remain for Shanghai, which is down more than 20 percent from its January high on concerns about a slowing economy, even before new US tariffs threatened by Donald Trump kick in Friday.
China’s yuan however stabilised after a rally on comments from central bank chief Yi Gang, who pledged to keep the exchange rate stable and avoid using the currency as a weapon in any trade war.
The unit has fallen around eight percent since the end of March, adding to fears about the economy as leaders struggle to cap massive debt while supporting growth.
Despite the central bank’s reassurances, “the markets remain very bearish on China… well over and above trade tensions, as waning growth momentum has contributed to diverging economic indicators versus the US,” said Stephen Innes, head of Asia-Pacific trade at OANDA.