Asia Markets: Asian markets sink as U.S.-China tensions rise, U.S. tech stocks fall

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Stocks fell in Asia early Friday, following rising tensions between the U.S. and China and a selloff of tech stocks on Wall Street.

Hong Kong’s Hang Seng index HSI, -1.82% fell 1.9% while the Shanghai Composite SHCOMP, -2.24% sank 2.3% and the smaller-cap Shenzhen Composite 399106, -2.96% slide 2.9%. South Korea’s Kospi 180721, -0.61% declined 0.6%, and benchmark indexes in Taiwan Y9999, -0.50% , Singapore STI, -1.30% and Indonesia JAKIDX, -0.90% all dropped. Australia’s S&P/ASX 200 XJO, -1.15% retreated 1.2%.

Markets in Japan were closed for a holiday.

On Friday, China ordered the U.S. consulate in the western city of Chengdu closed, in retaliation for the U.S. closure of the Chinese consulate in Houston following allegations of spying.

“For investors, what matters is whether political escalation morphs into economic escalation. So far, there are no hints yet that either side is willing to ramp up the trade war in a global recession,” wrote Stephen Innes, chief global markets strategist at AxiCorp, in a note.

Stocks on Wall Street sank Thursday, led by declines by Apple AAPL, -4.55% and Microsoft MSFT, -4.34% .

The Dow Jones Industrial Average DJIA, -1.30% closed 353.51 points lower, or 1.3%, to 26,652.33, while the S&P 500 index SPX, -1.23% finished down 40.36 points, or 1.2%, at 3,235.66. The technology-heavy Nasdaq Composite Index COMP, -2.28% lost 244.71 points, or 2.3%, to 10,461.42.