Asian Shares Slide Amid Escalating EU-China Tensions

Asian stocks fell broadly on Tuesday after a coalition of western nations announced sanctions on Chinese officials for alleged human rights abuses against Uyghur Muslims. China immediately announced retaliatory sanctions against the EU that appeared broader.

China’s Shanghai Composite Index dropped 31.93 points, or 0.9 percent, to 3,411.51 as China imposed tit-for-tat sanctions over rights abuses. Hong Kong’s Hang Seng Index ended down 387.96 points, or 1.3 percent, at 28,497.38.

Japanese shares gave up early gains to end notably lower as investors fretted over the volatility of U.S. bond yields and steep declines in Chinese stocks on policy tightening and valuation worries.

The Nikkei 225 Index fell 178.23 points, or 0.6 percent, to 28,995.92, while the broader Topix closed 0.9 percent lower at 1,971.48.

Companies that rely on China led the losses, with robot maker Fanuc losing 1.6 percent and construction machinery maker Komatsu giving up 1.2 percent.

Transport firm Kawasaki Kisen Kaisha plunged 7.2 percent and Mitsui OSK Lines tumbled 5.8 percent. Japan Exchange Group, the operator of the Tokyo Stock Exchange, climbed 2.8 percent after raising its full-year net profit forecast.

Australian markets gave up early gains to end slightly lower amid growing tensions between China and the west. The benchmark S&P/ASX 200 Index slipped 7.10 points, or 0.1 percent, to 6,745.40, while the broader All Ordinaries Index ended down 8.40 points, or 0.1 percent, at 6,986.60.

Lender ANZ lost 1.3 percent, while the other three big banks ended down between 0.4 percent and 0.9 percent. Afterpay and WiseTech Global fell over 2 percent in the tech space.

Miners rose, with BHP and Fortescue Metals Group rising around 1 percent. Healthcare stocks also bucked the weak trend, with ResMed climbing 3.3 percent and Sonic Healthcare adding 3.5 percent.

Pharmaceutical supplier Sigma Healthcare surged 4.5 percent after beating its full-year earnings guidance. Telstra added 2.5 percent a day after the telecommunications giant announced plans to revise its corporate structure to unlock value.

Seoul stocks fell for the third straight day on concerns over rising bond yields and worsening U.S.-China relations. The benchmark Kospi ended down 30.72 points, or 1 percent, at 3,004.74. SK Hynix, Samsung SDI and LG Chem lost 2-3 percent.

Meanwhile, New Zealand shares rose modestly, with the benchmark NZX-50 Index climbing 65.25 points, or 0.5 percent, to 12,394.34.

Kathmandu Holdings surged 8.9 percent. The adventure sport retailer resumed dividend payments after reporting a surge in sales and profits in the first half.

U.S. stocks ended higher overnight as Treasury yields retreated amid a slate of bond auctions and ahead of testimony by Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen.

The Dow edged up 0.3 percent, the S&P 500 climbed 0.7 percent and the tech-heavy Nasdaq Composite rallied 1.2 percent.

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