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Nikkei Markets

Asian stocks fall after latest US-China tariffs kick in

Hyundai Motor, Kia Motors rise after August sales data

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan declined Monday as investors digested the imposition of a fresh round of punitive tariffs in the ongoing Sino-American trade war.

The Nikkei Asia300 Index fell 0.3% to close at 1,229.85.

Risk appetite waned on Monday after the U.S. and China escalated trade tensions over the weekend, with the U.S. imposing tariffs on $110 billion Chinese goods on Sunday. China, in response, said it is raising existing tariffs on $75 billion of U.S. shipments in two steps. A new 5% tariff on crude oil imports from the U.S. took effect on Sunday.

Uncertainty over the future of trade negotiations has weighed on investor sentiment in recent weeks as the exact timing of the next round of trade talks is yet to be announced.

"August has been a challenging month for markets," Hussein Sayed, the chief market strategist at FXTM, wrote in a note. "Expect volatility to remain elevated in September. Determining the impact of trade wars on economic growth and corporates' profitability is not an easy task. The fear of the unknown will eventually lead to less consumer spending, and companies cutting capital expenditures."

Hong Kong equities remained under pressure amid the ongoing political unrest in the city. Anti-government demonstrations carried on for a 13th weekend, with activists demanding the complete withdrawal of a controversial extradition bill and universal suffrage, among other things.

Hong Kong rail operator MTR declined 3.1% after a series of service disruptions over the weekend. Train services in the city were disrupted on Saturday because of clashes between anti-government protesters and police. Activists vandalized several train stations in the city. On Sunday, train services to and from the airport were suspended by authorities following demonstrations outside the main building.

Casino operators retreated after data released on Sunday showed Macao's gross gaming revenue declined by a wider-than-expected 8.6% in August. Galaxy Entertainment Group fell 1%.

Chinese equities, however, advanced after a private survey showed factory activity in Asia's largest economy expanded last month. The Caixin/Markit manufacturing purchasing managers' index reading released on Monday rose to 50.4 in August from 49.9 in July. A reading above 50 signals expansion.

This was in contrast to the official data over the weekend that showed manufacturing activity in China contracted last month.

Meanwhile, the State Council, China's cabinet, on Sunday said Beijing plans to provide more support for the economy, such as investing in infrastructure projects and regional development.

Hyundai Motor rose 2% in Seoul despite reporting a 6.2% decline in August global sales. The stock is up 10.5% so far this year.

Kia Motors, which reported a 2.1% increase in global sales for last month, ended 0.5% higher.

Markets in India and Malaysia were closed for local holidays. U.S. financial markets will be shut Monday for Labor day.

--Suzannah Benjamin

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