June 15 Reuters Chinese bluechip shares, reopening after a holiday, posted their biggest oneday drop in a month on Tuesday following fierce G7 criticism of Beijing, while broader emerging market equities looked set to snap a threeday streak of gains.
Geopolitics weighed too on Turkish assets, with the lira losing 1 after an AnkaraWashington meeting failed to yield breakthroughs. Analysts said emerging market currencies were generally jittery before the U.S. Federal Reserves twoday meeting.
MSCIs Asiaheavy index of EM equities was flat to weaker on the day. While most other bourses in Asian rose between 0.1 to 0.9, these were countered by losses of 0.7 to 1.1 on mainland China and Hong Kong stocks.
It is a combination of nervousness ahead of the Fed and the G7 signaling that it is standing together to stand up to China, said Jakob Christensen, chief analyst at Danske Bank in Copenhagen.
The Group of Seven countries criticised China over human rights, Hong Kongs autonomy and the origin of the coronavirus pandemic. Beijing denounced the statement as a gross interference in the countrys internal affairs.
Any action against China will spill over into Asian economies and markets, investors fear, with memories still fresh of the titfortat trade wars under Donald Trumps administration.
Strained ties with Washington have also weighed on Turkish markets, with Ankaras planned purchase of NATOincompatible Russian S400 defence systems a particular sticking point.