Traders in the region are concerned trade relations will not improve due to the USA blacklisting of 28 more companies and visa restrictions on official envoys.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.44 per cent. Slower growth in the United States and China, the world's two-largest economies, suggests less demand for energy in the future. "There's more uncertainty about where the Fed is really headed".
USA stock futures rose 0.22 per cent in Asia, but sentiment was weak after the S&P 500 ended 1.56 per cent lower on Tuesday in response to the U.S. visa restrictions.
China's Ministry of Public Security has for months been working on rules to limit the ability of anyone employed, or sponsored, by US intelligence services and human rights groups to travel to China. The developments would come as China and US delegates are set to kick off high-level trade talks on Thursday to resolve longstanding trade tensions.
Washington is also moving ahead with discussions about restrictions on capital flows into China, Bloomberg reported.
The United States is also moving ahead with discussions on possible restrictions on capital flows to China, with a focus on investments by US government pension funds, Bloomberg reported.
With the focus on trade talks, US President Donald Trump said he hoped Beijing would find a humane and peaceful resolution to political protests in Hong Kong, and said that it would have the potential to hurt the trade.
The pound slumped to one-month lows against the USA dollar, briefly slipping below $1.22, as talks between the United Kingdom and the European Union came close to collapse following a tense phone conversation between the UK and German leaders on Tuesday.
Sterling was little changed against the dollar after losing almost 1% over the past two sessions.
The dollar index .DXY fell 0.01%, with the euro EUR= up 0.16% to $1.0971.
On Tuesday, the 8th of October 2019, a basket of Wall St. stock indexes witnessed an en masse sell-off pressure, while latest escalation of Sino-US trade war involving a slew of cataclysmic punitive measures on Chinese firms, state governments and intelligences had added to investors' worries. Spot gold also rose 0.21% to $1,508.90 per ounce.
Benchmark 10-year notes US10YT=RR last fell 13/32 in price to yield 1.5819%, from 1.539% late on Tuesday. The spread between two-year and 10-year Treasuries, the most common definition of the yield curve, widened to 11.3 basis points. -China trade talks, surrendering an afternoon rebound after Fed Chairman Powell said the central bank plans to expand its balance sheet.
The Fed had been shrinking its balance sheet as it unwound crisis-era bond buying programmes. The decision to allow the balance sheet to grow is in response to the recent funding squeeze in money markets that led to a spike in short-term interest rates. The Hang Seng shed -0.81% while the ASX fell -0.71%.
Powell said balance sheet expansion should not be read as an effort to stimulate the economy, but weak data on the United States manufacturing and services sector last week rattled investors' confidence that the U.S. economy remained robust. U.S. West Texas Intermediate crude CLc1 settled at $52.59 a barrel, down 4 cents.
A larger-than-expected increase in U.S. crude inventories added to fears that the global oil market will continue to struggle with excess supply.