Asian shares post worst first half performance in 5 years

Reuters: Asian stocks declined sharply in June amid higher global bond yields and mounting China-US trade friction that threatened global economic growth.

In the first half of 2018, the MSCI Asia-ex-Japan index fell 5.4%, marking its biggest drop in five years. The Asian markets saw a similar dismal performance in 2013 when the US Federal Reserve said it would unwind its monetary easing policy, stoking a broad sell-off in regional markets.

Trade tensions between two of the world’s biggest economies - the United States and China - escalated last month keeping Asian markets on the edge.

The United States has threatened to impose duties on up to $ 450 billion of Chinese imports, with the first $ 34 billion portion set to go into effect by the 6 July deadline. Chinese stock markets dropped about 8% in June, posting their biggest decline in 29 months. China’s yuan was trading near a seven-month low yesterday as investors took a cautious stance amid a widening trade conflict.

Thailand and Hong Kong stocks saw a sharp decline in June, while New Zealand shares ended 3.3% higher last month.

New Zealand, India and Australia stocks have the highest price-earnings ratio based on 12-month forward earnings in the region, according to Thomson Reuters Eikon data.