Asian stocks fall as US accuses China of election meddling

By Annabelle Liang, The Associated Press

Asian markets were mostly lower on Friday after U.S. Vice-President Mike Pence claimed China had meddled with its midterm elections to unsettle the Trump administration, which Beijing has denied.

KEEPING SCORE: Japan’s benchmark Nikkei 225 fell 0.8 per cent to 23,788.65, and the Kospi in South Korea dropped 0.3 per cent to 2,267.99. Hong Kong’s Hang Seng fell 0.3 per cent to 26,553.56. Australia’s S&P/ASX 200 gained 0.2 per cent to 6,187.10. Stocks fell in Taiwan, Singapore and Indonesia. Markets on the Chinese mainland were closed for a national holiday.

WALL STREET: A sell-off in U.S.Treasury bonds, particularly longer term ones, sent interest rates sharply higher on Thursday. Fears that higher interest rates could eventually slow economic growth by making borrowing more expensive weighed on major U.S. indexes. The S&P 500 index gave up 0.8 per cent to 2,901.61, and the Dow Jones Industrial Average lost 0.7 per cent to 26,627.48. The Nasdaq composite tumbled 1.8 per cent to 7,879.51. The Russell 2000 index of smaller-company stocks was 1.5 per cent lower at 1,646.91.

CHINESE MEDDLING: U.S. Vice-President Mike Pence accused China of taking public and covert measures to interfere in the upcoming U.S. midterm elections. This includes targeting Chinese tariffs to industries in states that are crucial to Trump, intimidating scholars, and coercing U.S. businesses to speak out against the Trump administration, he said. Pence charged that Russian influence operations in the U.S. “pales in comparison” to Chinese operations. “China wants a different American president,” he said. Chinese foreign ministry spokeswoman Hua Chunying said Pence’s allegations were “groundless.” Separately, Bloomberg reported that China had inserted tiny chips into servers and computer equipment manufactured for the U.S. to steal its technology secrets, citing corporate and government sources. Apple and Amazon have dismissed the report.

ANALYST’S TAKE: “Risk sentiments remain fragile, especially with overnight news about China’s tiny chip hack and U.S. Vice-President Mike Pence’s tough words on China’s alleged interference in U.S. politics, which could point to a further escalation of the ongoing US-China trade war,” said Selena Ling, chief economist at OCBC Bank.

ENERGY: Benchmark U.S. crude added 58 cents to $74.91 a barrel. The contract lost 2.7 per cent to settle at $74.33 per barrel in New York. Brent crude, used to price international oils, rose 50 cents to $85.08 per barrel. It shed 2 per cent to $84.58 per barrel in London.

CURRENCIES: The dollar strengthened to 113.93 yen from 113.86 yen on Thursday. The euro fell to $1.1505 from $1.1515.

This article provided by NewsEdge.