Trump’s administration is considering imposing export restrictions on Semiconductor Manufacturing International Corporation
Most Asian stocks were lower on Monday amid rising tech tensions between Washington and Beijing. Hong Kong-listed shares of Semiconductor Manufacturing International Corporation plunged more than 20% after a U.S. Defense Department spokesperson said President Donald Trump’s administration is considering imposing export restrictions on the firm. If so, it would mark a major escalation in the tech battle between the two countries. In Japan, the Nikkei 225 closed 0.5% lower, South Korea bucked the trend, with the Kospi gaining 0.67% while the Shanghai Composite was down 1.87%. Overall, the MSCI Asia ex-Japan index was 0.27% lower.
European equities opened cautiously higher to start the week and look set to rebound from last week’s losses as investors shrugged off the recent sell-off in the US tech sector that drove global markets lower. On the positive side, China’s dollar-denominated exports beat expectations last month to climb 9.5% from a year ago. However, imports declined by 2.1% in the same period. The Stoxx Europe 600 rose 1% in the early hours of the session. U.S. markets are shut on Monday for the Labor Day holiday.
Meanwhile, major currency pairs have settled in tight trading ranges on Monday, with traders gradually shifting focus to the ECB monetary policy meeting due later this week. It is widely expected that the central bank will leave its policy unchanged but market participants will be looking for hints on the central bank’s future steps and its view on the outlook for the economic recovery in the region. EURUSD is unchanged for the day, sitting around 1.1840, with downside risks persisting amid US-China relations. Later today, the euro could challenge the 1.18 handle again if risk sentiment turns sour and sends the safe-haven dollar higher.
Elsewhere, bitcoin struggles to hold above the $10,000 handle at the start of the week. Yesterday, BTCUSD climbed marginally but failed to regain the 100-DMA that continues to cap the recovery momentum today. After the recent plunge, the leading cryptocurrency by market capitalization struggles to resume the ascent and stage a sustainable upside reversal, suggesting further losses could lie ahead at least in the short term.