Asian stocks sag, dollar broadly higher with trade in focus

TOKYO - Asian stocks tracked their global peers lower while the safe-haven dollar was broadly higher on Wednesday as worries over persistent trade conflicts curbed investor appetite for riskier assets.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent.

Australian stocks lost 0.4 percent, South Korea's KOSPI dropped 0.3 percent and Japan's Nikkei shed 0.25 percent.

US stocks had slipped on Tuesday as a drop in heavyweights Facebook and Nike added to worries over trade negotiations between the United States and other major economies.

MSCI's gauge of stocks across the globe shed about 0.5 percent the previous day.

"The US-Canada talks are due to resume today and this keeps trade issues at the forefront, with a wait-and-see mood prevailing in the equity markets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

Discussions between the United States and Canada were expected to resume on Wednesday after the last round ended on Friday with no deal to revamp the North American Free Trade Agreement (NAFTA), cooling investor confidence.

"Then there is the US-China trade issue, in addition to turbulence in the emerging market currencies that the markets have to worry about," Ichikawa at Sumitomo Mitsui Asset Management said.

Keeping investors nervous, fresh US tariffs on $200 billion worth of Chinese goods are expected to take effect after a public comment period ends on Sept. 6.

Emerging markets stocks and currencies faced their latest round of pressure with concerns brewing about inflation in Turkey and news South Africa had slipped into recession.

With investors avoiding emerging market currencies, the dollar rose broadly thanks to its safe-haven appeal.

The dollar index, which measures the greenback against a basket of six currencies, was steady at 95.406 after rising to a two-week high of 95.737 on Tuesday.

The greenback was little changed at 111.465 yen after climbing 0.35 percent overnight.

The euro was effectively flat at $1.1586 following a loss of 0.3 percent on Tuesday.

The dollar drew further strength from upbeat US indicators supporting the case for further interest rate hikes by the Federal Reserve.

Data on Tuesday showed US manufacturing activity accelerated to more than a 14-year high in August, boosted by a surge in new orders.

Crude oil prices dipped, weighed by a stronger dollar which tends to burden non-US buyers of dollar-denominated commodities.

US crude futures were down 0.7 percent at $69.38 per barrel.

Immediate focus was on Tropical Storm Gordon bearing down on the US Gulf Coast and its potential impact on production and supply networks. —Reuters