Asian markets were trading broadly lower in the mid-afternoon on Tuesday after Wall Street benchmarks all closed lower on Monday thanks to weak U.S. manufacturing data that was released yesterday. The U.S. Institute for Supply Management announced on Monday that its index of national factory activity declined in November by 0.2 points to 48.1, a reading which indicates that the country is in a period of economic contraction. The manufacturing industry makes up approximately 11 percent of the country’s economy. The reading negated analysts’ predictions of an increase to 49.2. Other data released on Monday showed that construction spending declined in October and that investment in private construction projects hit their lowest levels in three years.
Also pressuring markets was an announcement by U.S. President Donald Trump on Monday that he intends to place fresh tariffs on Brazilian and Argentinian steel and aluminum imports. Trump tweeted on Monday that the tariffs would take effect “immediately” and that they were necessary to protect U.S. farmers from the recent “massive devaluation” of Brazilian and Argentinian currencies. Trump’s inflammatory actions did not stop in South America, however. On Monday Washington announced that it intends to increase taxes on $2.4 billion of French products such as handbags and champagne to 100%, as retribution for France’s new digital services tax which is expected to harm U.S. companies.
As of 2:26 p.m. HK/SIN, Japan’s Nikkei 225 was trading down 0.64 percent, and Hong Kong’s Hang Seng Index was down 0.24 percent. South Korea’s Kospi declined 0.30 percent. Australia’s ASX saw the steepest losses, however, plummeting 2.19 percent. China’s benchmark indexes, the Shanghai Composite and the Shenzhen Composite were among the only indexes to trade higher, up 0.08 percent and 0.21 percent respectively. The losses came after all three major Wall Street indexes closed nearly 1 percent lower.
On the currency markets, the dollar was mixed against its primary trading partners, with the dollar index sitting a modest 0.05 percent higher at 97.90 .DXY. The greenback gained 0.16 percent against the yen, to 109.15, but it slid against the British pound, with the sterling gaining 0.05 percent to $1.2942. The euro was down slightly against the dollar, easing 0.03 percent to $1.1074.