Asia stocks extend global slide on Spain attack, Trump turmoil

Asian stocks, including Japan's Topix index, fell on increasing unease over global security and US policy paralysis.
Asian stocks, including Japan's Topix index, fell on increasing unease over global security and US policy paralysis.PHOTO: AFP

SYDNEY (BLOOMBERG) - Asian stocks extended a global slide on Friday (Aug 18) after terrorists struck a crowded tourist street in Barcelona, exacerbating unease triggered by mounting concerns about dysfunction in President Donald Trump's administration and US policy paralysis.

Equities fell in Tokyo, Sydney and Seoul along with US stock-index futures after the S&P 500 Index on Thursday tumbled 1.5 per cent, its second-biggest drop for 2017.

Japan's Topix index fell 0.9 per cent as of 9:24am in Tokyo, Australia's S&P/500 Index was down 1.3 per cent and the Kospi index declined 1.1 per cent. Contracts on Hong Kong's Hang Seng Index were down 0.3 per cent.

The MSCI Asia Pacific Index was down 0.6 per cent.

Futures on the S&P 500 declined 0.1 per cent. The Dow Jones Industrial Average fell 1.2 per cent on Thursday and the Nasdaq Composite Index lost 1.9 per cent.

US stocks sank overnight amid concerns Trump's stimulus plans are in increasing peril and amid heightened terror fears after at least 13 people died when a van ploughed into pedestrians in Barcelona. Speculation surfaced at one point that Gary Cohn, the former Goldman Sachs Group president who's Trump's top economic adviser and has been a figure of assurance to investors in an unorthodox White House, might resign. Markets were calmed temporarily on reports that Cohn, who has been leading efforts on tax reform, would stay.

It's been a tumultuous week for the administration, with Trump disbanding two advisory councils staffed by chief executive officers and slamming Republican members of Congress who were critical of his polarizing remarks following violence in Virginia. Meanwhile, the terror news was a reminder that geopolitical risks remain a threat, with nerves still raw after last week's escalation of tensions on the Korean peninsula.

Earlier, European stocks dropped as minutes from the region's last central bank meeting revealed worries among officials that the currency could overshoot. Gold and tin were among the best-performing metals, and zinc traded near a 10-year high.

The yen rose 0.2 per cent to 109.37 per US dollar, after advancing 0.6 per cent on Thursday.

The Bloomberg Dollar Spot Index was little changed.

The euro was little changed at US$1.1725 after slipping 0.4 per cent on Thursday.

The Australian dollar was also little changed, at 78.85 US cents.

West Texas Intermediate crude fell 0.2 per cent on Friday to US$46.99 a barrel, heading for a 3.7 per cent slump on the week.

Gold was little changed at US$1,287.92 an ounce.