HSI Sheds 2.3 Percent As Trade-war Fear Grips Asia

Hong Kong stocks suffered another sharp loss on Monday, extending last week's sell-off as dealers fear Donald Trump's steel and aluminium tariffs could spark a global trade war.

The Hang Seng Index fell 2.3 percent, to end at 29,886.

On the mainland, the Shanghai Composite Index inched up 0.1 percent, to 3,256, while the Shenzhen Composite Index rose 0.5 percent, to 1830 as Premier Li Keqiang set a 2018 economic growth target at "around 6.5 percent".

Global equities went into a tailspin last week after the tycoon unveiled his plans for the controversial levies, and while US investors ended last week on a slightly positive note, there is still the prospect of more volatility to come.

Japanese stocks hit a near five-month low due to a strong yen, with steelmakers and other exporters falling amid lingering fears of a trade war. The Tokyo benchmark Nikkei 225 index slipped 0.7 percent, to 21,042.

Sydney lost 0.6 percent and Seoul slipped 1.1 percent while Singapore was off 0.8 percent and Manila gave up 1.2 percent. There were also losses in Taipei, Wellington, Jakarta and Bangkok.

The US dollar came under further pressure on worries about a trade war, with the safe haven yen extending last week's gains, helped by comments from the head of the Bank of Japan last week suggesting crisis-era stimulus could be scaled back from next year.

The euro got support from news that German Chancellor Angela Merkel would form a new government, ending months of uncertainty in Europe's biggest economy, though Italy was on course for a hung parliament. (AFP)