Hong Kong, Shanghai Stocks Continue Retreat

Hong Kong stocks suffered fresh losses on Tuesday morning following last week's strong US jobs report that dented hopes for a big Federal Reserve interest rate cut.

The Hang Seng Index sank 0.8 percent, to 28,106 by the break.

On the mainland, the Shanghai Composite lost 0.2% to 2,927 and the Shenzhen benchmark slipped 0.4 percent, to 1,548.

Most Asian markets extended losses as traders globally ran for cover after hopes for a steep cut in borrowing costs vanished, stopping in its tracks an equities rally and pushing the US dollar higher.

"The better-than-expected job rebound is forcing the market to rethink its pricing on the number of rate cuts," said Oanda senior market analyst Alfonso Esparza.

"Three was the group-think forecast, now moving down to two, but always with an eye on the US-China trade war and its possible negative impact on US growth."

Seoul fell 0.2 percent to extend a sell-off sparked by last week's decision in Tokyo to restriction exports used by South Korea's chip and smartphone companies, in a row linked to Japan's use of forced labour during World War II.

The stand-off has hammered South Korean titan Samsung Electronics and SK Hynix, crucial producers of memory chips. Samsung is down around 5 percent since Monday and SK Hynix is off more than 3 percent.

Sydney was 0.3 percent lower, while Wellington, Taipei and Manila were also down. Singapore and Jakarta were slightly higher. (AFP)