Asian stocks follow Wall Street lower on trade war jitters

Traders on the floor of the New York Stock Exchange on Monday

European stocks slipped, Asian shares slumped and US equity futures fluctuated on Tuesday as turmoil in Hong Kong and Argentina spooked investors already on edge over the trade war.

Stocks in Asia slipped on Tuesday as tensions escalated in Hong Kong amidst reports that China's military may step in and quell the protests.

The benchmark Shanghai Composite Index fell 0.63 per cent, or 17.73 points, to 2,797.26, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, shed 0.69 per cent, or 10.36 points, to 1,498.63.

Futures on the S&P 500 Index fell 0.1% as of 9:21 a.m. London time.The Stoxx Europe 600 Index decreased 0.2%.The MSCI Asia Pacific Index declined 1.2%.Hong Kong's Hang Seng Index declined 2.1%. NY time.The Stoxx Europe 600 Index rose 0.5%.The MSCI Asia Pacific Index decreased 1.3%.The MSCI Emerging Market Index decreased 1.3%.

Argentina's market also stumbled on political fears. Hong Kong futures dropped more than 1% after regular trading closed Monday.

However, surging US shale oil production is hitting efforts to limit the global supply overhang pulling prices down.

The Dow closed 391 points lower on Monday, even as fears that ongoing tensions between the USA and China could lead to a global recession mounted.

Investors sought safety in US government bonds, sending their yields tumbling.

The Swiss franc, which along with the yen is considered a safe haven in times of trouble, traded at 0.9697 per dollar, near its highest in a year.

The S&P 500 lost 1.2 percent to 2,883.09. Futures on the S&P 500 Index edged higher after USA stocks lost ground on Friday. The Nasdaq Composite was down 51.14 points, or 0.64%, at 7,908.00.

Trump has promised 10% tariffs on some $300 billion in Chinese imports that haven't already been hit with tariffs of 25%.

At the weekend, Trump upped the ante with Beijing into what is becoming a new Cold War when he made it clear that planned trade talks with China in the United States next month could be shelved after resuming in July. Treasury bond yields once again fell sharply as investors piled into safe assets.

The Bloomberg Dollar Spot Index rose less than 0.1%.

Adding to the concerns of a global recession, Argentina's currency and equities fell after the country's incumbent president suffered an unexpected defeat in primary presidential elections.

The move away from risk sent gold prices higher and U.S. Treasury yields lower.

The spread of Italy's 10-year bonds over Germany's declined five basis points to 2.33 percentage points. Viacom shares fell 4.4%.

Shares of tour operator TUI rose over 3 percent after it said robust business outweighed problems with the grounding of Boeing's 737 MAX jets in the third quarter and upheld its annual earnings outlook.

China-sensitive stocks including Caterpillar, Deere and Boeing all declined more than 1%. The new tariff would go into effect September 1 and more directly affect US consumers. Brent crude oil, the global standard, added 4 cents to close at $58.57 a barrel. Brent crude, used to price global oils, declined 19 cents to $58.38 per barrel in London. The market mood has been hit by steep losses in the previous session.

The yen last fetched 105.37 per dollar, and was within striking distance of 105.03, its strongest since the January 3 flash crash. The euro strengthened to $1.1219 from $1.1207.

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