Asian shares mostly flat, Japan hurt by Sino-US tensions

TOKYO/SINGAPORE (Reuters): Asian stock markets, including China’s, were little changed on Monday, shrugging off news that the US administration is considering delisting Chinese companies from US stock exchanges.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.05% while China’s Shanghai stock index slipped 0.2%, barely responding to any of the concerns around the latest Sino-US tensions that caused the Nasdaq index to fall more than 1% on Friday.

Risk assets took a hit in US trade on Friday following news the Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from US stock exchanges. The report knocked Chinese shares listed on US exchanges, with Alibaba Group Holding falling 5.15% and JD.com 5.95% on Friday. Worries such an escalation would hurt Japan the most however weighed on the Nikkei, which shed 0.45%. 

US stock futures gained 0.44%, paring most of Friday’s 0.53% fall in the index. 

Trading in Chinese markets was quiet ahead of a long break. Chinese share markets will trade only on Monday this week ahead of the country’s National Day holiday, which runs until Oct. 7.

There were mixed signals from China’s manufacturing surveys on Monday, which showed sustained weakness in exports and surprising improvement in domestic consumption indicators, and a Chinese central bank statement briefly hinting at plans for more stimulative policies.

China’s yuan was little moved at 7.1192 yuan per dollar, while the offshore yuan rallied a bit from Friday’s three-week low of 7.1520.

The delisting of Chinese companies from US stock exchanges was part of a broader effort to limit US investment in Chinese companies, two sources briefed on the matter told Reuters.

A US Treasury official said the United States does not currently plan to stop Chinese companies from listing on US exchanges, Bloomberg reported on Saturday.

US data on Friday showed consumer spending barely rose in August and business investment remained weak, suggesting the American economy was losing momentum as the trade dispute drags on.

 Industrial output in Japan and South Korea, released Monday morning, dropped more than expected, underscoring the headwinds from the trade war.

Investors are also keeping a wary eye on US politics.