Asia stocks trade lower as Hong Kong continues to grapple with crisis

 cnbc.com  08/13/2019 00:28:33   Eustance Huang

Stocks in Asia traded lower on Tuesday morning as Hong Kong attempts to return to normalcy following protests in the last few days.

The Hong Kong airport reopened on Tuesday after operations were crippled on Monday due to protests, which have turned increasingly violent since June.

The Nikkei 225 in Japan dropped 1.48% in early trade following its return from a holiday, while the Topix index shed 1.41%.

South Korea's Kospi slipped 0.63%, while the S&P/ASX 200 in Australia declined 0.31%.

Overall, the MSCI Asia ex-Japan index shed 0.26%.

The Chinese yuan midpoint will be watched when it comes out around 9:15 a.m. HK/SIN. The People's Bank of China set the midpoint above the psychologically important 7-yuan-per-dollar level for the third consecutive session on Monday. The Chinese currency has been closely watched by investors in recent days after it weakened past the 7 level against the greenback last week, leading the U.S. Treasury Department to designate China a currency manipulator.

Overnight stateside, the Dow dropped 391 points to close at 25,896.44, while the S&P 500 fell 1.24% to end its trading day at 2,882.44. The Nasdaq Composite declined 1.2% to close at 7,863.41.

That came as bond yields declined amid concerns over the state of the global economy. The benchmark 10-year Treasury yield, which fell to its lowest since 2016 last week, dipped to 1.63% on Monday. The spread between 2-year and 10-year Treasury yields narrowed to only 6 basis points on Monday, near its lowest level since 2007. It was last at 1.6522%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.380 after falling from highs above 97.5 yesterday.

The Japanese yen traded at 105.37 against the dollar after seeing lows above 105.5 in the previous session, while the Australian dollar changed hands at $0.6754 following a decline from levels above $0.676 yesterday.

Emerging market currencies will be watched on Tuesday by investors for signs of contagion following the Argentine peso's sharp fall against the dollar on Monday after the country's leader lost the first round of elections by a far greater margin than expected.The Argentine peso shed nearly 25% of its value to around 59 per U.S. dollar shortly after trading opened.

Oil prices declined in the morning of Asian trading hours, with international benchmark Brent crude futures slipping 0.12% to $58.50 per barrel and U.S. crude futures shedding 0.13% to $54.86 per barrel.

What's on tap today:

  • Australia earnings: Challenger
  • Hong Kong earnings: WH Group, Sunny Optical

 CNBC's Yun Li and Reuters contributed to this report.

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