International Business: Asian markets tumble after Wall St battering as China retaliates

Dow plunges 700 points amid escalating trade war between US, China

Stocks fell sharply on Monday after China chose to raise tariffs on some USA goods as the ongoing trade war between the world's largest economies intensifies.

The Dow Jones Industrial Average on Monday fell 617.38 points, or 2.38 per cent, to 25,324.99, the S&P 500 lost 69.52 points, or 2.41 per cent, to 2,811.88 and the Nasdaq Composite dropped 269.92 points, or 3.41 per cent, to 7,647.02.

The S&P 500 .SPX and the Dow .DJI recorded their largest percentage drops since January 3 on Monday in one of Wall Street's worst selloffs this year after China hit back with tariffs on $60 billion worth USA goods.

The recent run of losses has knocked almost 5% off the S&P 500 since hitting an all-time high on May 1, putting the index on course for the biggest monthly decline since December.

Mike Wilson, Morgan Stanley's chief US equity strategist, told clients in a note Monday that higher USA tariffs on Chinese goods will likely turn into a a headwind for corporate earnings - and the economy could fall into a recession if the country's trade war keeps escalating.

"An eventual agreement still seems the most likely outcome, although political miscalculation is a rising risk", said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute.

The S&P 500 posted 12 new 52-week highs and 22 new lows; the Nasdaq Composite recorded 30 new highs and 151 new lows.

The Dow is up 2,204.59 points, or 9.4%. Many are still confident that both sides will eventually reach a deal. The VIX, however, is still far below the elevated levels it reached at the end of previous year when the S&P 500 came extremely close to entering a bear market, meaning a decline of 20% or more from a recent peak.

CSL gained 1.5 per cent to $200.84.

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But Asian stocks fell on Monday as traders followed Wall Street's example and braced themselves for a prolonged trade war. Tech stocks in the S&P 500 jumped 1.6%, with semiconductor companies making particularly big gains.

The worries about trade have shattered a remarkably steady rise for stocks.

Gold fell 0.3% to $1,297.70 an ounce.

China industrial production and retail sales are slated for Wednesday, the same day as USA retail sales and industrial production. Yields on 10-year German bunds slipped to the lowest since 2016, but they jumped for Italy's debt, as the nation's deputy premier Matteo Salvini racheted up tensions over the country's deficit.

Trump also said he thinks the U.S.is winning the country's trade dispute with China.

Uber's shares rose another 6.4 percent in after-the bell trading after a United States labour agency said it had concluded that the company's drivers were independent contractors, not employees.

Down under, Australia's traded 1.0% lower.

Many market players "downplayed" the significance of the March inversion, he added, believing the Federal Reserve would sit on its hands so as not to derail the economic expansion. The company reported first-quarter losses that were wider than expected, but revenue that topped expectations. US crude dropped 1% to settle at $61.04 per barrel.

CURRENCY: The dollar edged up to 109.64 yen from Tuesday's 109.61 yen.

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