Australia

Australian shares look set to slide at the open after mixed performances on Wall Street overnight, with tech stocks dragging as Facebook and Twitter executives defended their companies before sceptical US politicians.

In futures trading, the SPI200 futures contract was down 25 points, or 0.4 per cent, to 6,190 points at 8.30am Sydney time. The Australian dollar is buying 71.93 US cents, having recovered from another drop on Wednesday to close at 71.74 US cents.

On Wall Street overnight, the Dow Jones Industrial Average was up 22.51 points, or 0.09 per cent at 25,974 points, but energy and tech stocks weighed on the S&P500, bringing it down 8.12 points, or 0.28 per cent, to 2888.

The tech-heavy NASDAQ index was down 96.07 points, or 1.19 per cent, to 7995 points, dented by technology stocks after Facebook and Twitter executives defended their companies before congress.

Twitter shares dropped 6.1 per cent and Facebook shares fell 2.3 per cent, while others, including Alphabet, Snap and Microsoft Corp, were also down.

Meanwhile, concerns are mounting that a US proposal to impose tariffs on $US200 billion more in Chinese imports could go into effect soon after a public comment period ends on Thursday, even as the US-Canada talks to renegotiate the North American Free Trade Agreement continue.

Locally, July's trade balance is scheduled for release by the Australian Bureau of Statistics.

Asia

Japanese shares fell on Wednesday as worries that a tariff war between China and the United States could escalate weighed on sentiment, while concerns that tourists will shop less due to a typhoon flooding a major airport hit shares in cosmetic makers.

Japan’s Nikkei share average dropped 0.51 percent to 22,581, dropped for a fourth consecutive session following its eight-day winning streak while the broader Topix fell 0.77 percent to 1,705.

The Nikkei would have been hit harder if not for a 3.1 percent gain for index heavyweight Fast Retailing, following strong monthly sales data.

Hong Kong stocks tumbled the most since June and equities in mainland China also weakened after a brief rebound Tuesday, rattled by a possible escalation in the US trade war and wider turmoil in emerging markets.

Tencent Holdings was the biggest drag on the Hang Seng Index, which fell 2.6 per cent, though all 50 companies on the benchmark declined.

The Shanghai Composite Index closed down 1.7 per cent, as foreign investors dumped 3.1 billion yuan of mainland stocks via exchange links, the most since June 25.

Europe

European shares traded lower on Wednesday as trade tensions and growing worries about emerging market currencies cut investor appetite for risky assets.

The pan-European STOXX 600 ended down 1.1 percent at a two-month low, with losses spread across sectors and trading centers despite data showing that Euro zone business activity accelerated slightly in August.

A rare glimmer of optimism lifted Italian banks, buoyed by deputy Prime Minister Matteo Salvini saying that Rome would “try to be good” with respect to European Union budget rules.

Rating agency Scope also issued a note saying that while “volatile politics have reignited fears around Italian banks”, there has been progress on non-performing loans.

Shares in UBI Banca, Banco BPM and Mediobanca rose between 3.3 and 7.2 percent.

Corporate announcements also triggered strong swings.

French pharmaceutical group BioMerieux rose 4.7 per cent after better than expected first-half results and a raised 2018 outlook.

In the same sector, Bayer lost 1.7 percent after reporting a disappointing 3.9 percent gain in underlying core earnings for the quarter.

North America

As well as Facebook and Twitter, shares of other tech companies, including Alphabet, Snap and Microsoft Corp, also fell. In the consumer discretionary sector, investors also sold off shares of Amazon.com and Netflix, two members of the group of stocks known as FANG.

Tech and consumer discretionary stocks were the biggest weights on the S&P 500. The S&P 500 technology index fell 1.5 per cent, and the S&P 500 consumer discretionary index fell 1.1 per cent.

Energy stocks added to the S&P 500's losses.

Halliburton fell nearly 6.0 per cent after the oilfield services provider warned third-quarter earnings could be hurt from moderating activity in the Permian Basin and a slower-than-expected ramp-up of new Middle East contracts.

Rival Schlumberger dropped 1.5 per cent and Baker Hughes, the oilfield services arm of General Electric, fell 2.2 per cent.

With concerns over trade simmering, Commerce Department data showed that the US trade deficit hit a five-month high in July, which economists said could heighten the White House's resolve to aggressively pursue an "America First" approach to trade.

China's JD.com slid 10.6 per cent, down for the second day in a row, after police said the retailer's chief executive officer Richard Liu was arrested in Minneapolis last week after a rape allegation. Liu has denied any wrongdoing and was released on Saturday.

 

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Morningstar with AAP, Reuters and Bloomberg 

Lex Hall is content editor, Morningstar Australia

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