SYDNEY (BLOOMBERG) - Stocks dropped in Europe and Asia alongside US equity futures on Tuesday (Aug 13) as turmoil in Hong Kong and Argentina added to trade tensions and dented sentiment. Treasuries advanced with gold.

The Stoxx Europe 600 Index opened lower, pulled down by banking and industrial shares, as contracts on the three major US equity indexes all dropped.

In Asia, the brunt of the sell-off was borne in Hong Kong, where protesters again targeted the airport and the city's leader warned it risked sliding into an "abyss."

Japan's benchmark equities gauge erased this year's gain. The US dollar firmed, while the yen was little changed. China's 10-year bond yield fell to 3 per cent for the first time since 2016 as data showed credit demand dropping.

The latest sell-off in risk assets is adding to already skittish sentiment across markets during the low-volume month of August. With the US and China offering no respite to their trade war and a slew of data pointing to slowing global growth, traders will look to this week's euro-zone GDP figures and industrial production reports from both China and the US for further clues.

"You've got the problem of the protectionist push leading to this downdraft in the economic data, leading to stretching the cycle," said Ben Powell, chief Asia-Pacific strategist at BlackRock Investment Institute. "A combination of those two themes is creating quite an unusual and challenging macro investment environment that we all have to wrestle with."

Signs of the trade war's impact are growing. Singapore's government cut its forecast for economic growth this year to almost zero as the region's most trade-reliant economies are under pressure.

Meanwhile, Argentina's peso sank on Monday and its equities crashed after voters turned on the president in a primary vote.

These are the main moves in markets:

• Stocks:

Futures on the S&P 500 Index fell 0.1 per cent as of 8:13am London time.

The Stoxx Europe 600 Index decreased 0.3 per cent.

The MSCI Asia Pacific Index declined 1.2 per cent.

Hong Kong's Hang Seng Index declined 1.8 per cent.

• Currencies:

The Bloomberg Dollar Spot Index climbed 0.1 per cent.

The onshore yuan weakened 0.1 per cent.

The euro dipped 0.2 per cent to US$1.1188.

The Hong Kong dollar advanced less than 0.05 per cent versus the US dollar.

The British pound sank 0.3 per cent to US$1.2045.

• Bonds:

The yield on 10-year Treasuries decreased two basis points to 1.62 per cent.

Britain's 10-year yield declined three basis points to 0.463 per cent.

Germany's 10-year yield fell two basis points to -0.61 per cent.

Italy's 10-year yield dipped three basis points to 1.676 per cent.

• Commodities:

Gold climbed 0.7 per cent to US$1,522.20 an ounce.

Silver increased 1.8 per cent to US$17.37 per ounce.

West Texas Intermediate crude fell 0.6 per cent.