ASIAN MARKETS fell as fears of global trade war continued to dog investors, with Donald Trump threatening fresh tariffs on European cars and reports he is  considering curbs on Chinese investment in the US.

There was little sign of relief after equities suffered a pummelling last week in response to tit-for-tat warnings by Beijing and Washington which had fuelled concerns about the potential damage to the world economy.

Tokyo ended 0.8 percent lower, while Hong Kong and Shanghai were both off more than one percent. Sydney lost 0.2 percent and Singapore shed 0.8 percent. Taipei and Manila were both one percent lower, while Seoul and Wellington barely moved. 

In early European trade London fell 0.7 percent, while Paris and Frankfurt each shed 0.6 percent.

While some observers are saying Trump's moves are part of negotiating tactic, he has shown no signs of backing down.

Late Sunday he tweeted : ''The United States is insisting that all countries that have placed  artificial Trade Barriers and tariffs on goods going into their country,  remove those Barriers  & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer one way street!"

The People's Bank of China on Sunday said it would lower the amount of cash lenders must keep in reserve as it looks to soothe investors worried about a trade conflagration.

The cut - which will free up more than $100 billion for banks - is set to come into effect on July 5,  the day before new US tariffs are due to be imposed on Chinese imports worth $34 billion. [Agencies]


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