Pedestrians walk past an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan. Picture: REUTERS/KIM KYUNG-HOON
Pedestrians walk past an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan. Picture: REUTERS/KIM KYUNG-HOON

Tokyo/Singapore — Asian stock markets, including China's, were little changed on Monday, shrugging off news that the US administration is considering delisting Chinese companies from US stock exchanges.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.05% while China's Shanghai stock index slipped 0.2%, barely responding to any of the concerns about the latest China-US tension that caused the Nasdaq index to fall more than 1% on Friday.

Risk assets took a hit in US trade on Friday following news the Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from US stock exchanges.

The report knocked Chinese shares listed on US exchanges, with Alibaba Group falling 5.15% and JD.com 5.95% on Friday.

Worries such an escalation would hurt Japan the most however weighed on the Nikkei, which shed 0.45%. US stock futures gained 0.44%, paring most of Friday's 0.53% fall in the index.

Trading in Chinese markets was quiet ahead of a long break. Chinese share markets will trade only on Monday ahead of the country's National Day holiday, which runs until October 7.

There were mixed signals from China's manufacturing surveys on Monday, which showed sustained weakness in exports and surprising improvement in domestic consumption indicators, and a Chinese central bank statement briefly hinting at plans for more stimulative policies.

China's yuan was little moved at 7.1192 yuan per dollar, while the offshore yuan rallied a bit from Friday's three-week low of 7.1520.

The delisting of Chinese companies from US stock exchanges was part of a broader effort to limit US investment in Chinese companies, two sources briefed on the matter said.

A US treasury official said the US did not currently plan to stop Chinese companies from listing on US exchanges, Bloomberg reported on Saturday.

“While China runs a current-account surplus and is a net creditor nation, Chinese companies are net debtors and rely on foreign capital,” Koji Fukaya, president of Office Fukaya Consulting.

“Washington seems to be trying to limit Chinese companies' activities by putting pressure on their funding,” he said.

Still, with trade talks between the US and China expected to be held on October 10-11, many market players are hoping such drastic measures on capital markets will be avoided.

“At this point, markets will have to wait and see. Of course we need to be guarded against more crazy headlines, but this week could be a bit calmer given holidays in China. Economic data will likely be the main driver for markets,” Societe Generale director of forex Kyosuke Suzuki said.

US data on Friday showed consumer spending barely rose in August and business investment remained weak, suggesting the US economy was losing momentum as the trade dispute dragged on.

Industrial output in Japan and South Korea, released on Monday morning, dropped more than expected, underscoring the headwinds from the trade war.

Investors are also keeping a wary eye on US politics.

US House speaker Nancy Pelosi said public opinion was now on the side of an impeachment inquiry against Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelenskiy.

Major currencies were little changed in early trade. The yen traded flat at ¥107.94. The euro hovered at about $1.0932, having sunk to a 28-month low of $1.0904 on Friday as concerns about tepid growth in Europe weighed on the common currency.

The pound traded at $1.2285, not far from Friday's low of $1.2270, its lowest since September 9.

Boris Johnson said on Sunday he would not quit as Britain's prime minister even if he failed to secure a deal to leave the EU, insisting only his Conservative government could deliver Brexit on October 31.

Oil prices slightly rebounded after last week's slide.

Saudi Arabia's crown prince warned in an interview with CBS programme “60 Minutes” aired on Sunday that crude prices could spike to “unimaginably high numbers” if the world did not come together to deter Iran.

But Mohammed bin Salman said he would prefer a political solution to a military one, adding the attacks on Saudi Arabia's oil facilities earlier in September were an act of war by Iran.

Brent crude futures rose 0.05% to $6.94 a barrel while US West Texas Intermediate (WTI) crude gained 0.25% to $56.05 per barrel.

Reuters