Asian Shares Retreat On US Bank Concerns

(RTTNews) - Asian stocks declined on Friday as heightened concerns over U.S. banks' loan portfolios added to worries about the ongoing U.S. government shutdown and escalating Sino-U.S. trade tensions.

Chinese and Hong Kong shares fell sharply after reports emerged that the U.S. may impose up to 500 percent tariffs on China over rare earth limits and Russian oil, risking global trade turmoil.

As trade tensions mount, China said the United States had "deliberately provoked unnecessary misunderstanding and panic" over the rare earths' restrictions.

China's Shanghai Composite index slumped 1.95 percent to 3,839.76 while Hong Kong's Hang Seng index plummeted 2.48 percent to 25,247.10.

Japanese markets tumbled and the yen extended its run of three consecutive sessions of gains after Bank of Japan Governor Kazuo hinted at a possible October rate hike.

The Nikkei average fell 1.44 percent to 47,582.15 while the broader Topix index settled 1.03 percent lower at 3,170.44.

Banks led losses amid signs of credit stress at U.S. regional banks. Mitsubishi UFJ Financial, Sumitomo Mitsui Financial and Mizuho Financial lost 3-4 percent. Technology investor SoftBank Group tumbled 3.4 percent.

Seoul stocks ended on a flat note as negotiations between South Korea and the United States over a $350 billion investment fund entered a decisive phase.

The Kospi average rose more than 1 percent to a fresh record high of 3,794.87 before giving up all gains to end marginally higher at 3,748.89. Tech, auto and battery stocks led the gains.

Australian markets fell notably after hitting a record high in the previous session on hopes for further policy easing by the Reserve Bank of Australia.

The benchmark S&P/ASX 200 dropped 0.81 percent to 8,995.30, with energy and tech stocks bearing the brunt of the selling. The broader All Ordinaries index closed down 0.88 percent at 9,293.20.

Across the Tasman, New Zealand's benchmark S&P/NX-50 index fell 0.75 percent to 13,289.21, snapping a two-day winning run.

The dollar extended slide and was poised for its biggest weekly drop in over three months after a Federal Reserve official indicated he would vote for another interest-rate cut later this month.

Gold scaled a new peak at $4,379.29 an ounce while oil hovered near five-month lows on demand worries and mounting concerns over a potential supply glut.

Overnight, U.S. stocks ended firmly in the red after regional banks Zions Bancorporation and Western Alliance both disclosed problems with loans, adding to concerns over credit stress following the bankruptcies of two automotive-related companies First Brands and Tricolor Holdings.

Sentiment was also dented by heightened U.S.-China trade frictions and data showing manufacturing activity in the Philadelphia region contracted sharply in October.

The Dow dipped 0.7 percent, the S&P 500 shed 0.6 percent and the tech-heavy Nasdaq Composite declined half a percent.