Asia stocks sink after losses on Wall Street

HONG KONG (AFP/APP): Asian stocks sank Wednesday, tracking losses on Wall Street as investors grew anxious about a possible economic slowdown and the absence of any progress in resolving the US-China trade war.

Economists say the trade dispute between the world’s top two economic superpowers will have grim implications for consumers, who will have to bear the costs of punitive tit-for-tat tariffs.

Although an index of US consumer confidence on Tuesday registered an unexpectedly strong jump for May, it was not enough to allay investor fears, as US stocks sank, sending major indices to their lowest levels in two months. May is now expected to be Wall Street’s first down month for the year.

“Unless we see a trade deal, negative sentiment in the market will likely continue,” Kyoko Amemiya, senior market advisor at SBI Securities, told AFP.

A report in Chinese state media that suggested Beijing would restrict exports of rare earths, using the minerals as leverage in the trade dispute, also fanned anxiety.

Rare earths are a key component in devices ranging from smartphones and cameras to televisions, and any move to restrict their supply would have a devastating impact on manufacturers, with China producing more than 95 percent of the metals.

Tokyo sank 1.2%, while Hong Kong fell 0.6%. Seoul also plunged 1.3% while Sydney slipped 0.7 percent and Singapore edged down 0.4 percent. But Shanghai inched up 0.2 percent.