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Asia stocks trade lower; Shanghai debuts Nasdaq-style tech board

Lisa Micheal 54 July 21, 2019

Stocks in Asia traded lower on Monday morning, as a Nasdaq-style technology board on the Shanghai Stock Exchange marked its debut.

In mainland China, the Shanghai composite slipped 0.36% in early trade, while the Shenzhen composite dropped 1.834% and tech-heavy Chinext composite fell 2.303%.

The STAR market started trading in Shanghai on Monday, as shares of the first batch of 25 companies surged in early trade following a massive oversubscription prior to their public debut.

Over in Hong Kong, the Hang Seng index slipped 0.86%.

The Nikkei 225 in Japan declined 0.3% in morning trade, with shares of convenience store chain Familymart dropping about 2%. The Topix index also fell 0.3%.

Japanese Prime Minister Shinzo Abe's ruling coalition won a majority in the country's upper house of Parliament in elections on Sunday. That came as Japan remains embroiled in a trade dispute with South Korea.

"I hope with the election out of the way, Abe feels the pressure is off him to take a hard line," Richard Martin, managing director at IMA Asia, told CNBC's "Squawk Box" on Monday.

"There is scope to come back to the table and renegotiate," Martin said. "Without that election pressure on him, i hope he can do it."

South Korea's Kospi traded largely flat as shares of chipmaker SK Hynix surged more than 2%. Over in Australia, the S&P/ASX 200 traded fractionally higher.

In market action stateside, stocks saw their worst performance since late May last week. The S&P 500 and Nasdaq Composite fell more than 1% each, notching their biggest weekly loss since late May, while the Dow Jones Industrial Average declined 0.6%.

Those moves came amid the ongoing earnings season, with more than 15% of S&P 500 companies having reported earnings so far. Of those firms, 79% have posted a better-than-expected profit, according to FactSet data.

Meanwhile, tensions remained high in the Middle East. Iran said it seized a British-flagged oil tanker in the Strait of Hormuz last Friday, claiming that the vessel was "violating international regulations."

Oil prices, however, moved with less velocity than might have been seen during other periods of tension.

In the morning of Asian trading hours on Monday, crude prices advanced. International benchmark Brent crude futures added 1.28% to $63.27 per barrel, while U.S. crude futures gained 0.84% to $56.10 per barrel.

"Tensions between Iran and the West continue to escalate with the tit for tat increasing in magnitude and thus increasing the risk of someone making an overstep leading to a military conflict, notwithstanding the fact that Iran, the US and its allies continue to say that they do not want a conflict," Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a note.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.236 after touching levels below 96.9 last week.

The Japanese yen traded at 107.96 against the dollar after seeing levels above 108.0 in the previous trading week. The Australian dollar changed hands at $0.7042 after touching lows below $0.702 last week.

Here's a look at some of the data set to be released later today:

  • Hong Kong: Consumer Price Index for June at 4:30 p.m. HK/SIN
  • South Korea earnings: Samsung SDS, Samsung Biologics, Samsung Heavy, Hyundai Motor, Hyundai Heavy

— Reuters and CNBC's Fred Imbert contributed to this report.