Asia report: Markets broadly lower as trade war concerns deepen

Asian markets closed largely lower on Tuesday after China retaliated against the latest round of US tariffs by announcing that it will slap tariffs on $60bn-worth of American goods starting from 1 June.

The increased tariffs on goods including liquefied natural gas and toothpaste were in response to Washington’s decision last week to hike its duties on $200bn of imports from Chinese imports, along with "US unilateralism and trade protectionism" according to China's ministry of finance.

The news caused chaos on Wall Street, with the Dow Jones Industrial Average and S&P 500 down at least 2%, and the Nasdaq plunging 3.5%.

Commenting on the latest developments in the trade spat between the two giants, analysts at Mizuho Bank said: "A clear hardening of attitudes, with state media blaring that China 'will fight to the end,' has stirred concerns of a protracted and widening trade war."

Japan's Nikkei 225 fell for the seventh consecutive session on Tuesday, finishing 0.59% lower at 21,067.23 as shares of Bridgestone fell 2.95% after announcing a 22.8% year-on-year decline in first quarter operating profit the day before with stock car manufacturers Isuzu and Mazda caught in the ensuing downdraft.

Meanwhile, versus the US dollar, Japan's yen was down 0.33% at JPY109.66.

On the Chinese mainland, the Shanghai Composite index fell by 0.69% to 2,883.61 and the tech-heavy Shenzhen Composite dropped by 0.62% to 1,542.07 on news of the escalating trade war.

Chris Beauchamp, chief market analyst at IG, said: "Asian markets remained under pressure, and while US futures are looking more positive the escalating trade war is still driving bearish sentiment. Ironically of course the tariffs imposed by both sides will hit consumers, so as in all great contests this is turning into a test of endurance, with the US and China each looking to derive the maximum impact from the increased charges in a bid to hit their opponent where it hurts."

Hong Kong's Hang Seng Index dropped by 1.50% to 28,122.02 as tech and videogames giant Tencent fell by 2.98%, while South Korea's Kospi bucked the regional trend to finish 0.14% higher at 2,081.84 as shares of chipmaker SK Hynix jumped 1.50%.

Brent crude was up by 0.20% at $70.37, while WTI slipped 0.31% to $60.85.

Down under, Australia's S&P/ASX 200 was 0.92% lower at 6,239.91 as Mayne Pharma's shares dropped by 15.04% after the company warned that year-to-date sales had been impacted by additional competition on key generic products and market trading pressures.

New Zealand's S&P/NZX 50 meanwhile fell by 0.56% to 10,070.35 with shares of Infratil dropping 2.61% as the company said it will raise new equity to help fund its portion of a $3.4bn takeover of Vodafone New Zealand, while Synlait Milk, Air New Zealand and Pushpay Holdings all followed suit.

The Australian dollar was unchanged against the greenback at AU$1.44, while New Zealand's dollar climbed by 0.24% to NZ$1.52.