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Asian Equities Fall on Lackluster U.S. Retail Data, Trade War Worries

Asian equities fell on Thursday – Asian equities fell in morning trade on Thursday as investors took their cues from overnight U.S. shares after retail sales figures came in weaker than expected. Prospects of trade war concerns also continued to weigh as U.S. president Donald Trump reportedly planned to impose fresh tariffs on China, intensifying concerns of a global trade war while traders await next week’s rate decision by the Federal Reserve.

Larry Kudlow, a free trade advocate, is set to replace Gary Cohn as White House economic adviser. Cohn resigned last week after losing his fight against tariffs on steel and aluminum imports.

Government bonds on the other hand attracted safe-haven demand. The benchmark United States 10-Year plunged to 2.804% amid rising diplomatic tension between the UK and Russia, weak U.S. retail sales data and concerns over the country’s political issues.

Japan’s Nikkei 225 slipped 0.4% by 9:45pm ET but still up roughly 1% on the week. A stronger yen was cited as a catalyst for the selling in stocks. The country’s industrial production data are due on Friday.

In China, the Shanghai Composite was down 0.4% but the SZSE Component edged up 0.2%. Reports that China imposed a logistics company with a $870 million fine for manipulating the stock market in 2017 received some attention as it was the biggest ever punishment for such an infringement. Sunac China Holdings Ltd (HK:1918)’ chairman Sun Hongbin resigned after just eight months in office.

Hong Kong’s Hang Seng Index also fell 0.3%. Air China Ltd (HK:0753) made headlines after reports said the company was in talks to buy HNA’s Capital Airline, a move that would eliminate competition from the only airline that shares Beijing with Air China as a home base. Cathay Pacific Airways Limited (HK:0293)’s stocks jumped 6.3% after posting better-than-expected earnings.

Elsewhere, South Korea's central bank chief Lee Ju-yeol said on Thursday there would be no automatic acceleration of policy tightening.

"As was the case until now, the Monetary Policy Board will comprehensively consider the economic conditions, inflation trends and financial market situation to decide the benchmark interest rate."

The Bank of Korea is due to review monetary policy on April 12.

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