Asia shares slip as China orders US consulate closed

Worsening China-U.S. friction, worries over aid to Americans and U.S. businesses and a stumble on Wall Street combined to push shares in Asia lower on Friday. Shanghai led regional declines, with its Composite index giving up 3.1% to 3,220.65. Hang Seng in Hong Kong lost 2.4% to 24,663.68.

Trump ministration officials have escalated ir public condemnations of China in last several weeks, with speeches by FBI Director Chris Wray, Attorney General William Barr and Secretary of State Mike Pompeo. As expected, China anunced closure of U.S. consulate in western city of Chengdu. move was in retaliation for U.S. order earlier this week to close Chinese consulate in Houston, Texas.

latest dust up between two biggest ecomies comes amid allegations of ft of U.S. intellectual property including by Chinese researchers with military and government connections — for Beijing’s benefit.

“Alongside eviction of Houston Chinese Consulate, risk of U.S.-China conflict escalating into a “Cold War” is worrying,” said Hayaki Narita of Mizuho Bank.

A speech by U.S. Secretary of State Mike Pompeo’s saying that “securing our freedom from Chinese Communist Party is mission of our time” ds to rhetoric certain to incense Beijing, making it still more difficult for eir side to back down, he said.

“And so, while inevitability of deteriorating US-China relations as a structural feature of our geo-political landscape was never in doubt, shifts appear to be hastened,” Narita said.

In or Asian tring, S&P/ASX 200 in Australia gave up 1.2% to 6,021.40. South Korea's Kospi shed 0.5% to 2,202.81. Analysts said investors also are wary over unclear progsis for furr stimulus for U.S. ecomy, just as end of a previous pack of extra support for those me jobless by pandemic looms.

Republicans in Senate were set to unveil ir proposals for a $1 trillion COVID-19 rescue pack Thursday morning, but that got delayed. Finding a compromise with Democratic-controlled House of Representatives could prove more difficult than it was in March, when Congress produced a $2 trillion rescue pack.

A report Thursday that tally of American workers applying or unemployment benefits rose last week by 109,000 to a little more than 1.4 million broke a stretch of 15 straight weeks of improvements. That shook investor optimism that recession might be shorter lived than expected.

rise in unemployment comes as coronavirus counts continue to rise across much of Sun Belt, leing to more business closures and total number of confirmed cases has surpassed 4 million in U.S. S&P 500′s 1.2% drop, to 3,235.66, was its first loss in five days and its worst in nearly four weeks. Techlogy stocks h sharpest declines after a better-than-expected profit report from Microsoft failed to satisfy investors who were expecting even more. Because Microsoft is one of largest U.S. stocks by market value, its movements have an outsized effect on indexes like S&P 500.

Dow Jones Industrial Aver lost 1.3% to 26,652.33. Nasdaq composite fell 2.3%, to 10,461. Smaller stocks held up better, and Russell 2000 index of small-cap stocks was virtually unchanged, ding 0.06 points to 1,490.20. yield on 10-year Treasury was stey at 0.58%, down from 0.59% late Wednesday. It tends to move with investors’ expectations for ecomy and inflation.

Gold for delivery in August lost $7.40 to $1,882.60 per ounce. It rose $24.90 overnight to settle at $1,890.00 per ounce. Benchmark U.S. crude vanced, gaining 4 cents to $41.11 in electronic tring on New York Mercantile Exchange. It gave up 83 cents to $41.07 per barrel on Thursday. Brent crude oil for September delivery ded 12 cents to $43.43. It fell 98 cents to $43.31 a barrel overnight. In currency dealings, dollar bought 106.39 Japanese yen, weakening from 106.86 yen. euro rose to $1.1600 from $1.1596.