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SE Asia stock markets fall sharply on U.S.-China coronavirus tensions

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Southeast Asian stock markets fell sharply on Monday after U.S. officials tried to blame China for the coronavirus pandemic, stoking worries of fresh tensions between the two countries

Southeast Asian stock markets fell sharply on Monday as risk sentiment turned sour after U.S. officials tried to pin blame for the coronavirus pandemic on China, stoking worries of fresh tensions between the world’s top two economies.

U.S. Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the new coronavirus emerged from a Chinese laboratory, doubling down on Washington’s pressure on China over the virus’ origin as U.S. deaths and economic damage mount.

The accusation came after Donald Trump’s threat late last week of retaliatory measures against China as punishment for the outbreak, once again sparking tariff fears that rattled markets through much of the last two years.

Trade war clouds once again loom ominously on the horizon as the hawks in the U.S. administration are poking the trade war hornet’s nest, while putting China in the crosshairs accusing the Wuhan lab as the epicentre of COVID-19, Stephen Innes, chief market strategist at AxiCorp, said in a note. Rekindling a dormant U.S.-China trade war will likely make any economic improvement exponentially more difficult.

In Southeast Asia, Philippine shares slumped as much as 3.5% in their biggest intraday fall since April 16, after a survey showed manufacturing activity contracted in April.

Property developer SM Investments Corp declined up to 5.8%, while food and beverage company Universal Robina Corp fell 3.5%.

Singapore shares tumbled as much as 3.3%, their sharpest intraday drop since March 30.

Industrial conglomerate Sembcorp Industries dropped nearly 5%, while Singapore Telecommunications slid more than 4%.

Malaysian shares shed as much as 2.3%, their worst in six weeks, ahead of March trade data.

Telecommunications conglomerate Axiata Group fell 4.8%, while Digi.com lost more than 3%.

Meanwhile, the Thai stock market was closed for a national holiday.

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