economies are symptomatic of an effective you where nations and -- viewpie rather than growing it. todd, thanks for paul: good morning. joining us. up next, president trump calls huawei dangerous and says it may i am paul allen in sydney. have part of a trade war with china. btl coming -- details coming up you are under one hour away from the market open. from washington. and later, narendra modi's >> good evening from bloomberg's global headquarters in new york. i am kathleen hays. sophie: i am sophie kamaruddin economic challenges after his landslide election win. we will check what markets are in hong kong. watching. welcome to "daybreak asia." this is bloomberg. ♪ paul: our top stories this friday, president trump turns up the trade war heat. he says while he is dangerous and may have to be included in any talks with china. to fall ass are set

investors seek safety. the yen strengthens. yields dropped to their lowest since 2017. india shifts further to the right as narendra modi celebrates a dramatic victory. he must fix the slowing economy and the looming jobs crisis. kathleen: after a quick reminder of how u.s. stocks ended the session, you can call it a couple where me. the trade war continues to escalate, affecting tech investors. preliminary members. small-cap stocks getting clobbered. you can see the damage that was done at the top of the board. dow jones industrials moving 1.1%. s&p a little bit worse. 1.2%. 20.22, the level there. the nasdaq martek heavy, losing 1.6%. green atttle sign of the bottom of your screen.

it will be interesting to the s&p active futures -- see the s&p active futures. will they take a look at the damage done today? let's get right to see future -- sophie. sophie: futures are hinting at a tepid sessions with -- session with losses across the board in asia. most asian markets losing ground. withuphoria is waning aussie stocks set to extend declines and we have the yen gaining ground this morning. the u.s. commerce lines on currency deregulation. kathleen: president trump is the global bond rally is turning up the heat even further continuing with aussie 10 year on huawei, saying he may insist yields slipping further at historic lows after benchmark to a 2017ields sank it becomes part of future trade talks with china. he spoke with another big tech name. low. microsoft removed the company here is a chart you will want to keep in your back pocket today. from one of its sites that offers gear. >> huawei is something that is asian airlines stocks down more

than 14%. with thehis in view very dangerous. you look at what they have done from a security standpoint, from a military standpoint, it is meeting held with regulators, very dangerous. it is possible that huawei would paul. paul: thanks very much for that, be included in some kind of sophie. first word news with ed ludlow. a trade deal. i can imagine huawei being included in some form of or some ed: a senior government researcher in beijing's has part of a trade deal. kathleen: let's bring in gregg china and the u.s. may be locked in a trade war. sullivan, joining us from relations worsening before they improve. he said the two will spend a few washington, where he is watching donald trump very closely. how does this strike you? years testing each other's did that pop into donald trump .trategy head during the press conference -- donald trump's head during anticipated misjudgments could make negotiations difficult. the press conference? >> president trump has been the new york fed put a price on the tariffs, saying they are costing american families $831 a focused on huawei lately. his administration moved to year. imf contradicting president blacklist the company last week and require u.s. companies to get government permission to do trump about who is footing the war.for his trade business with them. then again, we hear president trump saying this company, while the friend says american companies are paying almost all very dangerous, was also could the costs from the duties on potentially be part of any trade chinese imports, repeating the deal in negotiations with china. president' and -- president's frequent claim. when the u.s. administration first moved against huawei,

there were some observers who wondered if this was a negotiating chip to wrest most costs are being absorbed by importers. indian equities declined in the rupee weekend as in -- weakened. further negotiations from china. the trump administration waited to move against huawei, worrying closed down in it would interfere trade negotiations. when those talks hit an impasse mumbai, erasing a gain above earlier this month, then the administration was willing to the company.list 40,000 for the first time. -- thety the client those signals indicate president trump is willing to consider the companies fate in any final negotiated deal, and again, it nifty declines. global news, 24 hours a day, on is similar to a move we saw a earlier with the tea -- with air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. zte. i am ed ludlow. this is bloomberg. in some ways, not surprising kathleen, paul. kathleen: hardest hit in the today. last 30 minutes or latest selloff, stocks and so, we have had a statement from the u.s. department of industries seen as susceptible to trade disruption. commerce as well saying they su keenan has more. will impose duties on countries there's reasons for all of those that moved to undervalue their centers getting hit hard. currency versus the dollar. bearish signals is that the intention? that is correct.

out there. we also have this outlook there is no direct mention of china in that statement, but it did say that u.s. is beginning reality check that this trade the initiation of a rulemaking war is not ending anytime seen. imposing whatrt let's get right to the market snapshot. are called countervailing duties against countries that to 10 year yields falling to the undervalue the currency relative to the u.s. dollar. lowest since 2017. that was a very big part of this story. wilbur ross in that statement warning foreign exporters that falling.had oil using their currencies against theses. would incur the commodity almost down to the 57 dollar level and bouncing penalties and hinting that back a bit. president trump's big campaign promise to take on currency undervalue words, this is the energy stocks taking a huge hit. let's take a look if we can at first step in a process of holding them to account. the russell 2000 going into the bloomberg. one could infer that china would gtv is where you can find our be a potential target of charts. the title is where is the this. support? taking on what trump perceives the russell 2000, the small caps as misaligned trading had been a safe haven for a lot of investors from the volatility relationships is a big part of we have been seeing. his administration. it fell below the 100 day moving yet again, this is a lesson in his administration's arsenal. paul: thanks for joining us. average, and that is a signal of more to come. meanwhile, chinese experts are

now conceding that this might be at the energyook just the beginning of a protracted trade standoff with stocks that were hit hard and right at the top, i have got a the united states that could chart showing the intraday last years is not decades. was bigger than forhen engle joins us now 6% and came back a bit towards the end but a lot of this having to do with the reality of trade more on that. both sides really appear to be digging in here, don't they? conflict if not more between stephen: that's right. u.s. and china, negative for and the many decades i have been demand on top of everything else the -- energyd covering china, one thing i noticed consistent in the messaging coming from the chinese over the last in particular was the fact that declined 17% for neighbors. they bring up consistently that they will not continue to be, that was the area of the sector hit hardest. you know, put under pressure by paul: it is not just small caps and energy. chips and autos also hit hard. foreign powers. and again, we are getting officials in china referring back to the 1800s and the opium not and they will a full-blown escalation of the tariffs. tell us about it. the the full-blown -- su: necessarily be put under that, so that is how the mindset of the in beijing. the latest person to echo these full-blown sentiment seems to sentiments is a chief researcher capture the market. they have been hit hard because of the ban on huawei. many of these are either at the chinese government-backed directly or tangentially china center for international economics ranges, speaking --

affected by that. let's take a look at the autos. exchanges, speaking at a president trump said he would briefing arranged by the chinese kick the can down the road a little bit. government. he previously worked at the national development and reform the decision on when to impose auto tariffs, but there is a commission, which is the chinese government's top planning body. knowledge they are coming and he says, you know, these trade autos and auto suppliers getting tensions could likely last until hit as well. 2035. after hours, real interesting. mix of earnings that showed that is the date china has put there might be some positivity on the calendar for achieving from hewlett-packard which its socialist modernization, have -- meaning managed to meet its revenue and outlook. paul: su keenan, thank you very much for the upset of the markets. theing us for more is that it would have technology innovations on par with western powers. put these economic cycles principal portfolio strategies cio, todd. and five-year plans. i want to start off with one of that we another 16 years from 2000,charts, the russell now so and others three cycles another three the small caps moving below the hundred day moving average. i know you like large cap spirit cycles of economic planning before the trade war could be this chart rather serves to highlight your point. resolved. it is a very interesting part if you are looking for somewhere that chinese government and to hide in all of this, where researchers are portraying to did you go? the world. kathleen: it is interesting to think about lenovo and how it

todd: i feel fortunate we moved fits into the trade war. to an overweight of large caps and underweight of large-cap -- were an ibm products. small caps. , it became lenovo. the reason behind that move i have had one here at was in fact to lower volatility by going up towards mega-caps. bloomberg. how did they put all that together and how it embroiled are they? when you get exposure to stephen: lenovo bought the mega-caps, you not only naturally drift towards the and the brand in 2005 large-cap cohort of the population with the lower standard deviation, you get the benefits of global server business in 2014. they have had a number of diversification in a subset of different acquisitions in the u.s. names. corporations having united states. they have a second headquarters in north carolina. they like to position themselves foreign affiliates selling overseas, it gives them the as a company that bridges both option to bypass tariffs and the united states and china but operate locally in the market. they could be embroiled in this mega-caps.y not all trade war since they are originating of course in china. how selective do you have to be? todd: that is a great point. there has been speculation perhaps that they would also cut off supplies to huawei, which the key element i think in a was a big purchaser of lenovo mega-cap exposure is really to understand what you are doing to pc's. pull down volatility and what is at is what the cfo told me yesterday after the earning the biases that go with that view? period in hong kong. is one of our 30

are pushed towards customers. we will continue to service them sectors such as infotech, subject to complying with the financials, consumer names, that do have more global trade bias. rules and regulations. stephen: again, this is a big at the same time, it does move you away from some of the more question we are trying to find domestic sectors such as real out for many u.s. companies and estate and utilities. the key information is to view international companies and whether they are going to cut this as an asset allocation off ties and customer relations trade more than the sector with huawei. trade. kathleen: another excellent interview from our north asia structurese low-cost correspondent, stephen engle. plenty more to come. this is bloomberg. ♪ thee is able to reduce portfolio and get downside protection on days like we saw today when large caps outperformed mid, small, and on market. isl: one of your themes foreign direct investment and how that is looking more attractive to you as tariffs are hitting goods that are produced. explain that to us. how do you play that as an investor? a longer-term investment. it is not like mega cap stocks

you can get in and out of that will. todd: mega-caps are interesting and globalization's are interesting as means to access a different form of global commerce. a lot of times, they are talking about direct imports and exports which are subject to tariffs, which is taking a service and moving across. the key to understanding the market for direct investment is understanding what this enterprise captures. it captures beverage makers in one geography selling their products in another. their font affiliates, which generate foreign affiliate sales and foreign affiliate earnings, a mega-cap transnational corporation offers global diversification and what we believe is a more efficient ability control capital, by understanding the means of

production and the cost of production and the opportunities in a more diverse geography, we feel the nevada exercise to about companies to identify opportunities to allocate resources to the highest return products. give give us -- kathleen: us an example of one of these mega-cap companies you really like? todd: i've view this from a more asset allocation framework. that leaves me towards implementation. when looking at implementation on mega-caps, the key feature is look at what your managers are doing. a lot of managers tend to just .nto mid-cap stocks going for. have expression in asset allocation views that is perhaps an etf structure or some other simplified access to that cohort of the equity market can give you inexpensive, effective liquid exposure to companies with local divers the vacation and lower standard deviation. big picture long-term like kathleen: this is "daybreak asia ." i am kathleen hays in new york.

paul: i am paul allen in sydney. most people we talked to, i know you see an eventual resolution to this trade war but i guess the question is how long it indian equities and the rupee aches. as investors swiftly is there some small part of you that fears we are sitting up here for a bipolar world sold off the rally triggered by narendra modi's election like the cold war? victory. the sensex closed 1% down in todd: it is funny. mumbai, erasing the game that lifted the gauge above 40,000 i was just reading an article for the first time. over the weekend on that very subject that we might end up in let's bring in adam haigh. a technology world where there are two separate internet that we are still seeing indian do not connect. largestd's two stocks near records. why is that? adam: remember the timeline for this. we have had foreign money economies are having a hard time flowing into in unit equities agreeing on trade policy. the great risk discussions and way before modi's victory over the past 34 hours. negotiations is the end up with an economically negative outcome and in that economically -- sensex hit negative outcome, we could is pe the right exit polls at the start of the week which were already pretty much showing us that maybe modi would get a markets today. in 2019, global growth has victory strong enough just to twn the world's two largest have the majority on its own so we had a big mover at the start of the week and as early counting got underway on thursday, you got the initial the higher for equities and

rupee, and indeed some similar moves in bonds which ticked off the later part of the day, so in a sense, a lot of the move has already happened. a lot of investors are already anticipating this earlier on in the year and as it started to become clearer that modi would be getting an outright victory, you saw the huge wall of money from foreigners coming in and betting on indian markets that were still robust enough to keep earnings growth and stellar returns. uy the rumor and sell the fact. we have to look at real change from modi. what are we want to now most closely in terms of saving euphoria or potential for some fading but then some bouncing back? adam: that is it, kathleen. isn't it? that is why you're getting the caution coming in with you already saw in thursday trading with the rupee coming off an equities coming off record highs. it is down to modi's reform agenda.

the much talked about reforms that he has all has not done over the last two years has been one of the key themes for investors. from an equity valuation point, you have a market that is we are very test so hearing from a lot of investors, a similar time that speaks to the idea that really, things need to change to a pretty strong degree to get a real follow-through to get any further upside for risk asset. they are pricing in some very good news. there's plenty of things that sit on the bearish camp for indian markets including already slowing growth and the wider buffet that -- budget deficit and indeed the strength of the local currency with the rupee already getting into territory that starts to feel like authorities may have to stem in if we get a further move higher to limit that if it starts to drag on growth.

it feels like an inflection point for indian markets having had such a large move. paul: adam haigh in sydney. thank you for joining us. still to come, japan's latest cpi figures will show how far the central bank still has to go to meet the elusive 2% target. this is bloomberg. ♪

paul: all right. we are just getting breaking across the bloomberg, cpi figures for the month of april out of japan and they are coming in in line with estimates. and thatyear on year is the same for cpi. and energy, coming in .6% higher, in line with estimates. you have got to bear in mind we to still less than halfway the bank of japan's 2% inflation target.

the yen little moved on these numbers. kathleen. kathleen: thank you so much for setting us up for our next guest. let's look ahead to president trump's upcoming trip to tokyo. a university professor of economics and a former bank of japan policy board member. the numbers. no surprises there. when you look at the trends right now, at the forces that will push inflation higher or not, what do you see? >> prices are picking up mainly because of fresh food due to the weather conditions, and also increasing other food prices. , soave a special holiday the hotel accommodation. you know, those prices are picking up. once you exclude that, it is quite low. i think no major changes there. kathleen: i will bring up one of our charts. it shows japan cpi,

the two latest numbers around .9 , .9, and the key number is the overall number, fresh food. 3% and thoseshows lines are still a long way away. anything the bank of japan can do with monetary policy to boost inflation and get the economy growing so fast prices rise, or is it the fiscal policy and the government? policy, because there is the lack of demand and a growing number of consumers who do not have any debt, 17 percent of japanese households do not have any debt and those are good companies which increasingly have no debt. , having lowicy interest rates cannot create sufficient demand, so in that sense, monetary policy is an effective.

there is one possibility. usefulh flow could be for low income people, but i guess we have to discuss what would be the implication of our fiscal consolidation. modern we should accept monetary theory. ,athleen: before we get to that what about the question of the target itself? is way for the bank of japan to look at this problem is to see how the president of the austin said talked about it. a former member started writing about having an inflation target . there is time for central banks around the world to raise the inflation target is to show higher inflation expectations. to the bank of japan, should they drop the target altogether or go to a 1% to 3% range? sayuri: actually, i am advocating for that because

prices are already so high you low, statistically showing, inflation is so low. because of the wages not going up, they feel the living standards are not improving so they are not -- it is better to have some kind of range from 1% to 3%. boj is ableate the to have more flexible monetary policy, so range is one option. kathleen: one of prime minister in's closest advisers said an interview with bloomberg news that the consumption tax hike slated for october will mean the failure of abenomics. sayuri: a lot of consumers do not like it. it is disposable income. at the same time, the government

subsidies providing for childhood education. hike on food. data, a lot of condemnation. the impact of inflation is 0.2%. as 2014, so severe we have to consider that. so i think we have to -- what are we going to do with these countermeasures? can we get rid of all those subsidies as well? it is not clear to me. kathleen: one thing that might help on the margin would be a and heeal with the u.s., can that takes the pressure off of japan's exports. we have seen weakness coming

through in a number of reports. president trump and prime minister on they meeting this weekend. do you see any hope for one aspect at least of a deal to move forward? sayuri: i think so. a lot of japanese companies have optimism. our deficit is much smaller than china. only 17 billion compared to -- in the case of china with the u.s. and no tariff on japanese imports, so we don't have any intellectual property programs. you have to check what would happen to our automobile sector, which is our major export product. is the ball and president trump's court? there are some things we cannot

touch, certainly when it comes to cars. we produce a lot of cars in the u.s. and we have been doing that for a long time. you are not looking at the trade balance in cars between the u.s. and japan properly. now, japanese companies are producing so much. you know, japanese companies have a big share in the japanese -- in the u.s. market. at the same time, when you look at trade deficit with japan, the automobile accounts for 80%. if we want to know what mr. trump demands for the japanese government, they are going to demand export restraint from us or do they just want to shift production locations from japan to the u.s.? we don't know what will happen. we hoping the u.s. is not going to export these measures.

kathleen: president trump will be the first foreign leader to visit japan since the emperor took the thrown on may 1. to the japanese, this is huge. do you get a sense it is very important to president trump, and is there than this hope that all the honor and respect prime minister abe is bestowing on him might make a difference? sayuri: years come in tomorrow and will stay until tuesday in tokyo and japan and the japanese of --ment has a series luckily, mr. trump and mr. abe have a good friendship. he is the first guest of honor. i think the japanese government is hoping mr. trump will not be

so tough. kathleen: i have a couple questions for you. what is the top in the economic community in japan about the federal reserve right now? the federal reserve looking at, well, inflation well below target, looking at the damage the trade war could do, and still signaling no move? do the japanese agreed? it is something people wonder could be a mistake? sayuri: first of all, i think the economy is still strong and that is helping us. is the policysing becoming more dovish. around 2.5%. not a lot of interest differential. japanese yen against the u.s. dollar is moving, so that is quite good.

i think we are quite lucky. moment, theis policy appears to support the u.s. stock market and u.s. economy. kathleen: how about that? we will end on a positive note thanks to a former bank of japan monetary policy board member. from what stocks to watch in the market this morning, we are you watching? sophie: kathleen, we are watching numerous in tokyo -- nomura in tokyo. information leak at its domestic securities unit. it is conducting an internal investigation after the nikkei news reports and should a business improvement order be imposed by the fsa, it would be the first such penalty since 2012 amid an insider trading crackdown.

the stock trading at the lowest level since december 2012. history repeating itself perhaps. chip stocks are in view. the semiconductor shares faltered. samsung managed to gain ground. u.s. media reporting the has asked samsung to join the boycott. we watching toshiba in tokyo this morning. they resumed the supply of chips to huawei. we have seen toshiba shares take a bit of a dip. u.s.-japan bilateral talks. they may be holding their breath for a trade deal. relatedt japanese auto stocks skidding. the white line on this chart has wiped out the year's game just barely in the green as the carmaker leads the industry in pushing back against tariffs ahead of trump's state visit. with the industry and focus, i

int to highlight just how -- focus, i want to highlight that. switching that to take a closer look at the laggards. airline shares suffering as the carrier seeks -- southern has seen the steepest losses. it is one of five mainland carriers is seeking damage from order to delays and losses caused by the grounding of the jet. looking ahead, it expects limited short-term impact from the grounding and is forecasting that are margins for the chinese carriers this year. paul. very muchie, thanks for that. let's get to the first word headlines with ed ludlow. set toresa may is announce a timetable for her resignation. the backlash to her brexit

strategy grows. sources say she will put on june 10, triggering an election in downing street. from nigel farage, increasingly confident about his party's chances in the e.u. election. some officials at the ecb are worried about eurozone inflation after years of failing to reach their target. the april meeting saw members of the governing council describing the rate as "uncomfortably below expectations of price growth are falling. central banks are equally concerned. james bullard told bloomberg this week that inflation is a worry. u.s. aviation regulator says it is making progress with its foreign counterpart over how to return the 737 max 8 to the skies. regulatorsls brief from more than 30 countries on the steps it will take to recertify the ground plane. boeing is redesigning a software

system implicated in fatal crashes and expects to submit a final fix soon. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ed ludlow. this is bloomberg. kathleen, paul. paul: all right. thanks for a much for that. coming up next, caught in the crossfire, we will ask how the fight between china and the u.s. is affecting the rollout of 5g. this is bloomberg. ♪

kathleen: we are counting down to asia's first major markets open this morning. we are taking a nice beautiful sunny morning shot of seoul. you can see futures maybe not too surprising, pointing a little bit lower. about .5%. counting down also to australia, japan. it is all about u.s., i think. the big drop today.

what does that mean for asia and the rest of the world? speaking of asia, this is "daybreak asia." i am kathleen hays in new york. paul: and i am paul allen in sydney. the u.s. is hardening its stance on huawei. president trump called the company very dangerous. and the bipartisan group of senators has proposed a bill which would ban five g networks from using equipment or services from huawei or ate. select this -- zte. so let's discuss the impact with pat gelsinger who joins us from singapore. the broader context of this is the 5g buildout.how badly is this going to be hit? pat: good morning, paul. and great to be able to be with you and kathleen today. overall, when you think about 5g, this is the beginning of a 10 year capital investment cycle. and thus, while trade wars are never good and battles like this are never good for business and

new technologies, it is a 10 year cycle. bumpsl have its necessary along the road but we are quite optimistic 5g will be successful. we also believe we will have an increased role there. nokia, cisco, all of these will be participating in that rollout and even the important role huawei place, this will be resolved in time and we will see a good article in what we believe is maybe the most critical rollout that will happen over the next 10 years. paul: does this dispute sort of risk the coherency of this rollout? is it possible we will get two competing five-year-old let's? five-year rollouts? pat: different vendors would be supplying two differentpat: portions of the world.

clearly, huawei plays an important role, but it was not unique. one of the things about 5g and i think the entire role of the gsm a is standard that many companies can participate in. one of the key technologies is bringing virtualization into the core networks. never participated in the telco segment before and we are playing an active role with companies like vodafone. important, the near-term discussions are in the context of a major 10 year cycle that i believe many companies will be participating in in the worldwide basis. kathleen: everyone will participate. i want to get that clearer though. to you, it does not make any difference if there is uniform models and structures, products not develop it that can fit together easily.

does it hurt your business? does it help your business if it is not uniform? you have been in this business a long time. this can of trade war and the kind of things we are seeing, we have not seen maybe in our lifetimes. pat: clearly, trade wars are not good for business. they are not good for global business. we do see this creating tensions between the u.s. and china trading blocs. 5g is a global standard technology. in thatany participants technology rollout. one of the things that vmware has done is we give our customers hardware freedom, meaning we help them choose between different hardware vendors in the data center, between hp, dell, ibm, and in the telco cents. we give them different -- sense. we give them different

technologies and more choice and flexibility underlying network. yes, this is an important topic near term in the trade disputes that are going on. in the context of a 10 year cycle, i believe we will see a successful five g technology, one we are quite committed to and we believe this will usher in smart city,es in self driving and autonomous vehicles, bringing new telemetry and automation as never before, so we believe this is a powerful technology for the entire world over the next 10 years. strategicasia, a key trust for your business. you have partnerships with amazon web service alibaba, ibm. how does asia and how do these key partnerships fit into your future plans? thiswe see ourselves as cloud switzerland and we build partnerships and we have a

preferred primary partnership. number one and private. to bring together this hybrid cloud strategy. we have also partnered with alibaba. we announced recently a partnership with microsoft, and working with ibm as a clinical enabler. it helps customers take advantage of a multi-cloud future. we do believe the major competing clouds and regional clouds working in singapore. i was in india working with vodafone. of these is building out a cloud environment because customers will not need multiple choices for different regions, for different touch of workflows. we provide a switzerland type of capability that enables a

multi-cloud global rollout based on the vmware technologies, a key -- and key new technologies coming to market as well. kathleen: we know that switzerland has done pretty well with its model over the years. we can assume you have got a good plan in mind. thanks so much for joining us. pat: thank you, kathleen. kathleen: thanks so much. and you, do not forget our interactive tv function tv . , you can watch us live and dive into any of the securities or bloomberg functions we talk about. plus become part of the , conversation. send us instant messages during our show. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

kathleen: now for a quick check of the latest business flash headlines. hewlett-packard enterprise though in late trade after raising its profit forecast on

greater cost cutting. ceo is trying to make the rempany a key hardwa vendor, seeking to take advantage of technology trends. says it removed more than 2 billion fake accounts in the first three months of the year, a record for the company and more than three times the amount is closed in the same period last year. it says the vast majority were polled within -- pulled within minutes of being created. posts involved with drug and gun sales. kathleen: let's preview the market open in japan, south korea, and australia. for that, we are turning back to sophie. what is up or down? down,: we are looking bracing for losses in the region.

no tgif lines here even for the asx 200. nikkei futures are hinting at losses of about 1% ahead of trump's four-day state visit. it has risen half a percent this week against the greenback. japanese estoppels have it -- stock bulls have it. heels of aon the rough earnings season. results fell short of forecasts by 15% on aggregate. if the bottoming out of earnings is delayed, that can inflict flows. thanks very much. coming up on the next hour of havereak asia," we will more analysis on the indian election. we will be joined by nomura's chief economist. we will have the market open in australia, japan, and korea, coming up next. this is bloomberg. ♪

>> good morning, i'm paul allen in sydney. asia's major markets are about to open. kathleen: good evening from bloomberg's global headquarters in new york, i'm kathleen hays. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." paul: our top stories this friday. asian markets set to extend wall street declines as trade tensions rise again. future signal losses in tokyo, hong kong, and a sydney.

president trump is the catalyst. he says huawei is dangerous and may have to impart on future talks with china. kathleen: kathleen: japan's latest inflation reading comes in the forecast. we are less than halfway of the boj's target. haslinda: slam on -- i'm haslinda amin. the second. of modi led government. the market reaction and rupee, asns for the well as the challenges ahead with mark mobius. the open mumbai will be closely watched. inhoria waned in the markets the latter half of the session. here's how cash rate is ticking off in tokyo. losses of nearly 1% for the nikkei. trump's high ahead of

state visit. it is unlikely a trade deal will be cleansed, with issues like auto tariffs remaining. let's check on the kospi. as we getin focus more local media reporting that the u.s. is requesting south korean companies, including samsung, to join the huawei boycott. the korean won is sticking among the 11 and 19 value. checking in on the asx 200. bringing -- opening lower. of theia remains one asian markets in the green for the month. the aussie dollar looking at little change. all the bond yields are slipping to record lows with three-year lows. kiwi stocks., it things ever so slightly on some data to chew on. exports underpinned by gary shipments and annual exports of

china rising 2% -- 22%. let's check in on number of shares -- nomura shares. the broker says it is conducting a probe on the back of local reports that there was a leak of information in its domestic securities unit. investigators may look to impose a penalty when it comes to nomura's actions in this case. the first such since 2012, when they faced an insider trading crackdown. it continues to intensify at 2012 lows. paul: thanks very much. declines on the markets may not end there. there are a number of risk factors over the weekend. mark cranfield joins us from singapore. what should we be watching on friday into the weekend? people will want to know

whether the bearish momentum from wall street will carry over into asia. they will be looking at the opening of the chinese markets today. it does not appear to be any improvement in talks between the u.s. and china. we are expecting a very negative start in china, the hang seng index, as well. it will put a damper on what we have seen in asia. it is a long weekend in the u.s. it may give people the chance to reflect on what's happening, and whether or not the valuations seriously,be taken and whether there is anything to save equity markets at this stage. there is a lot. european elections going on, as well. a lot to come out to over the weekend. maybe given that time, people will have to reflect on it. they say equities have fallen far enough. is not good.e news the news flow from all angles, whether it's the u.s., china, the rest of the world, this

negative data has not been helpful. index numbersak from the u.s.. they really need something to turn the tide and possibly japan, will beo something. whether there is something positive to come out we will see. kathleen: i love this trip. they will talk trade. it seems there is so much more about meeting the new emperor, the first foreign leader to do so. they will play golf. has this worked for japan in the past? do you think it will work this time? mark: not too much. very first foreign leader to visit president trump when he was confirmed as winning the election in 2016. japan hasn't really gained too much since. they are still waiting to know whether they will be exempted from various things, including issues on autos.

japan has not benefited so far. if you look at the performance of japanese securities, they have not done a great deal since then, either. the real risk is the u.s. starts talking about the japanese yen, which japan would like to avoid at all costs. we've seen a story go over in the last half hour or so that says the u.s. is looking at currency under valuations again. not many details. if they use it as a taller gain, japan can fit into it with china and europe, along with anybody the u.s. t chooses to call a currency manipulator. the yen may be mentioned. if it is, currency markets can jump around quite a bit. paul: let's turn our attention to the equities markets in asia. stocks in asia poised for their third week of losses. you are watching the hang seng closely.

of whereood barometer we go in asia. it is a very liquid market. a lot of foreigners involved. you get a sense of the general sentiment towards asia when you see the direction of the hang seng. preachy.ot look too it has been breaking key support levels. volumes are starting to pick up. we have not seen the big capitulation you expect when the market is close to a serious bottom. there can be a downside. there is a risk of the hang seng rebounding. it is not unusual. it is very volatile. it can make huge springs to the downside in a quick period of time. there is a lot hanging on this in the next few days. if we break a support levels, it can wipe out everything we have seen this year. kathleen: that can be heard around the world, not just asia. thank you to mark cranfield joining us from singapore. let's get on to the first word news with ed ludlow. senior government

researcher in beijing says china and the u.s. may be locked in a trade war until 2035, with relations worsening before they improve. the two will spend a few years testing each other's strategy, cananticipated judgment make negotiations difficult. the new york fed put a price on that tariffs, saying they are costing americans $831 a year. president trump has branded andei as "very dangerous," said it could be included in parts of a future trade deal with china. the administration is open to choke off beijing's assess to keep -- access to key items through huawei. senators are proposing legislation that would ban american five g networks from using services from huawei and zte. that isi is something

very dangerous. you look at with a have done from a security and military standpoint, it's dangerous. it's possible huawei even would be included in a trade deal. if we made a deal, i can imagine huawei being included in some form of a trade deal. ed: japan's key inflation gauge went higher in april on higher fuel costs. several factors may weigh on prices in the coming months. consumer prices rose by .09%. japan remains far from the boj's inflation target. while its charges and pre-preschool education from october will add to downward pressure. day onnews, 24 hours a air and at tictoc on twitter, powered by more than 2700 and -- 2700 journalists and analysts in more than 120 countries. i'm ed ludlow. this is bloomberg. kathleen: still ahead, theresa may looks to step down in june after failing to get support for her brexit plan.

what can come next. paul: before that, we are live in new delhi to look at the sweeping election win. $1.4 trillion spending push. this is bloomberg. ♪

paul: indian markets initially surged on signs that modi and the bjp were heading for a big election win. now they are watching how he will tackle key issues and fulfill his election processes -- promises. let's head to our chief asia correspondent, haslinda amin. this is really his indian outcome a isn't it -- this is really his india now, isn't it? haslinda: however you look at it, it was a resounding and static victory for the bjp, for modi. this is the second time running that they have won a one-party

majority. the last time it happened was back in 2014. that was the first time in 20 years the party has been able to do that. in his victory speech, he talked about how he wants a new india. he says "i want to bow down my head and say thank you." he tweeted "together we grow, together we prosper, together we build a strong and encouraging growth. india wins yet again." this is significant. it is an endorsement of his leadership. endorsement of his partnership with party presidents, which some say is unbeatable. together, they have managed to pull india in this space. it is impressive how he has gotten support by focusing on the nationalistic fervor. therein lies some concern among the people here. leadership, the

people have been divided. some called this election in particular the most divisive election in decades. ishas to make sure it inclusive not just for the hindus, but the minorities, as well. that is one concern people have in this new india. kathleen: when we look at the market rally not lasting long, it makes me wonder, are people saying great? it wasn't like he was a weak leader in office before. he has to help the farmers with debt, deal with banks laden with bad loans, he needs infrastructure spending. there's so much he needs to do that he has not done yet. is that what the markets are waiting to see what he really does? you are spot on. most investors say that the markets in most of his win anyway. into the indiag

story. there are a lot of challenges. the fiscal consolidation will have to continue. the fiscal budget, 3.4% of gdp. towill find it difficult spend. he has a huge spending plan in excess of $130 billion. that have not been able to be carried out. he needs to build infrastructure. onele talk about how million indians will come to the market to look for jobs. -- labor laws will have to be looked at. a lot of options for him in the next five years. kathleen: thank you very much. haslinda amin joining us from india. that's our chief international correspondent for southeast asia. now, the immediate focus for india turns to the makeup of a cabinet and release of a budget in early july. ura's chief in nomor

india of economist. in terms of what happens to the farmers is so important. will modi be able to move ahead and make a difference for the ?ig budget deficit on on on one side, you want to get rid of their debt. what will happen now? when: there are 2 issues it comes to farmers. one is the income stressed the farmers are undergoing. for that, they have promised more income chances. not just to the small and minor farmers, but all farmers. this is clearly a shot down solution. a more durable solution will be required for production to insulate the farming sector from the monsoons, etc. for more medium-term, there are reforms that are clearly required. in that context, housing, that

is all something they need to look at. income be a mix of transfer, but not stopping there. continuing the path of more productivity. kathleen: beyond agriculture, which is a big part of india's economy, and we look from agriculture to manufacturing, where people have tried to invest in india from the outside, and i'm sure indians themselves. infrastructuree, that's rigorous, do you think can moveand his team on that, particularly when the deficit is big? when you spend money, you will make it bigger. sonal: i think we need to be optimistic, but cautiously. when it comes to things like land reforms, the reforms, it is not just within the centers of the mandates, it plays a big role.

if you look at the bottom of their story, there are a number of ministers in individual states pushing this agenda of doing business. one thing that we need to understand is when he came into power five years back, the biggest challenge was cleaning up the banking system, the mess the corporate sector was in, bringing down inflation, corruption, they have done a lot of cleaning in the last five years. unfortunately, the cleanup has come at the cost of growth. the big focus in the next five years will be how to kickstart growth. that requires more infrastructure spending, doing business, whether it is legal reforms, simplifying the tax structure. a lot of focus going forward will be on agriculture sector issues. not stopping there.

focusing on kickstarting the investment cycle for putting on infrastructure, the ease of doing business, as well. paul: i want to return to kathleen's point about the deficit. we have been talking about $1.4 trillion of spending to help the farmers. this is an environment of rising oil prices. also, the rupee is weakening. where is the money going to come from? sonal: that is a very good question. jp promised too high in what they said. it is very substantial. we cannot expect the government to fund infrastructure with that. it has to be a public directive partnership. the privatek sector, perhaps inviting foreign investors to invest in the infrastructure sector is clearly one way out. at the same time, how do we get

more revenue? how do we increase that compliance? i think these are some things that will also be tabbed. the headline, infrastructure targets are way too optimistic. we think the big challenge he faces in the short-term is the challenge on the growth front, particularly the nonbank finance company front. it means the significant fiscal consolidation will be quite difficult. like you said, the infrastructure spending has to be a mix of public private partnership. it cannot be purely government driven. paul: numerous chief india -- nomura's chief india economist. thank you very much. we will have special coverage live from new delhi and mumbai as indian markets react to the official election results.

in hong kong, 2:00 p.m. in sydney, and midnight in new york. stay tuned. ♪

kathleen: the u.s./china rift over trade and technology can have an extensive effect on global supply chains. manila's cfo spoke to bloomberg on how he views the tension and their plan for dealing with them. plansinitely have various to prepare for different scenarios that come up. as a global company, we really would want a more open market and free trade. in the event that does not happen, we obviously have plans to mitigate the potential sides of our business. if you look at our business, we are a lot more well spread. when you talk about markets, set aside the trade tensions between

the two major economies settling a global recession. if you look at the geographies, inare relatively well spread our business. china, asia-pacific, europe, middle east, africa, as well as america, u.s. and latin america. we have a global supply chain. changed inet whatever way, we will have different options and plans so we can move much quicker than our competitors for that change. paul: let's talk about the pc business. some of the numbers indicate that have been lackluster consumer demand. worldwide pc shipments fell in the quarter. since the mid-part of last year. in road to thet

u.s., a lot of big corporations and the re-buying cycle. does this trade war limit your ability to grow in the u.s., in particular, which is a core competency, given the think brand? >> i would look at it differently. onthere is not increase tariffs for the product, and we have ways to mitigate for the impact. wither we will continue business is if we can win over our competitors. because the business model we adopt, we will be able to do better from a mitigation of increasing cost perspectives. to predict.ifficult how the overall market is going to react if there is increased impact sprayed with demand impacted or not, we will operate within the market. within the home market, we can do better than apple because of this. willmpact for lenovo

probably be smaller, because in the u.s., you will find the number is 15%, there are friendly competitors which have succeeded higher numbers. have been inayers the countries affected. we have the ability to pull some of those out of the china to other countries much quicker than our competitors. paul: right now in the u.s., the ,an is on huawei, not lenovo to you have significant ties the u.s. suppliers. whether it is semiconductors and intel, your phones run on android, have you gotten indication that these platforms could be disrupted? what about android? we are finding that huawei will come up with its own operating system. is it something you have to keep in mind that you may have to do? earlierback to my

answer. as a global company, we are in full compliance. we are not aware that we are in breach of any rules and regulations. as a result, we don't see that we worry about being included. number two, absolutely no sense of that is happening. ink that is the best i can tell you. cfol: that was lenovo's see . let's get a look at the headlines. the roller coaster week continues for sprint and t-mobile shares for mixed messages on their potential merger. spring jumped in new york on a report that an antitrust member may be trying to find a way to support the deal. both companies soared on monday. they felt wednesday on reports that someone was against the merger. kathleen: nomura has conducted

an investigation following reports they face penalties following messages they leaked in the domestic security unit. keep it right here, more coming up. this is bloomberg. ♪

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paul: this is -- ed: this is "daybreak: asia." i'm ed ludlow with the headlines. contradicting president trump on who is footing the bill for his trade war. the imf says the banks are paying almost all the costs in a on chinese imports, refuting the president's frequent claim beijing is paying the u.s. treasury. some of the tariffs have been passed on to u.s. consumers, but most are being absorbed by importers. indian equities declined in the rupee weekend as investors sold the rally triggered by the prime minister's election victory.

they close about 1% lower in mumbai, raising a gain and lifted the gauge above 40,000 for the first time. the nifty also climbed up. the second government faces a slowing economy and looming jobs crisis. officials at the ecb are worried about the euro inflation after years of failing to reach their target. the april meeting some members of the government counsel describing the rate as "uncomfortably below target," and expectations of price growth are falling. other central banks are equally concerned. the new york fed told bloomberg this week inflation is a worry. the u.s. aviation regulator says it is making progress with its foreign counterparts over how to return boeing 73 max to the skies. by oneks were extended hour as faa officials briefed regulators for more than 30 countries on the steps it will take to recertify the planes.

boeing is rit region rising -- redesigning its system and will have it soon. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and more than 120 countries, i'm ed ludlow, this is bloomberg. kathleen: now it is time for another market check with sophie. sophie: asian stocks are sliding today with yields putting the regional index on track for a third week of losses. the nikkei 225 is up nearly 1% with other losses in sydney and seoul samsung losing more than 1%, weighing on the cost be. kospi.the evidence that growth is slowing. the forecast is for percent. robin to 84. the first in back to back to climb for singapore.

i want to kick off with movers in sydney. sliding as much as 3% after they turned in their earnings targets. m cell is rising. cost of keep all materials are down. it may boost earnings for the company. in tokyo, nomura shares are swinging after opening 1% lower as it investigates an internal probe of his domestic securities unit that has put it in regulator crosshairs and put them under pressure as they assess the impact of the huawei ban. moody's has put the company's a three rating to negative, given delays in making its profit union -- auto unions profitable. the nikkei news reports the department store's operator is in to cut by ¥10 million fiscal 2020. a share buyback reportedly being considered. a-shares,eck on a end slipping after the two notches

to underperform with the industry seen entering a two-year earnings down cycle. paul: it is not an easy time to be stockpicking in china's market. at its lowest in three months. the hang seng on track for its worst month in three years. let's get some insight from our next guest, who started this china focused hedge fund last year. joining us from hong kong is chris wong. thanks for joining us. this might seem rather counterintuitive, but you like chinese tech. can you explain that? chris: it is a very interesting and exciting time in the chinese market. over the last two years, it seems to be the norm, whether it is a financial crisis, you have the chinese economy with the anticorruption, you name it.

this is the time that is very exciting. what is happening globally in the trade war is impacting a lot of things good or bad over a long period of time. what we see is value propositions. the market is down, the msci china is down 12%. a lot of interesting values start to emerge. paul: you mentioned the msci china. bloomberghart on the we can take a look at that indicates what you are talking about. we see the msci china dipping. take a look at china's gdp growth. that's a trend. can you explain what is going on? china over the last 10 growth --chelated gdp key guarded gdp growth. if you look over the time, msci

china has averaged about 1%. all the robustness in growth in gdp did not help the index very much. fromis more interesting is some of the structural changes we see -- some of the new changes we see in the chinese economy. itot of champions creating for us to take advantage of. kathleen: we should talk about the champions. they are going to have to be champions in an environment where there is a trade war. it will put tariffs on anybody exporting and probably manufacturing goods. i know there's more of a services sector, but there are a lot of small/medium enterprises that depend on exports. jobs depend on that. as a hedge fund minister, do you say -- as a hedge fund manager, do you say --

chris: in each capital, we take a very concentrated approach to look for investments. given time, there are only 5-6 ideas. take the market push look at everything across the market. we are looking for situations where the company's economics does not get impacted by what is going on at the geopolitical scene globally. at the same time, you look out a couple of years, people still need to buy smartphones, go on youtube and watch videos. these are the companies that we focus on. we deploy capital for safely at moments like this. kathleen: you have some things, one of them is the transition from 4g to 5g. at least there is a bump in the road.

dining versus takeaway food. i was just in beijing for the first time. takeaway food is all there is. do people ever make food at home? do they just have it delivered? chris: if you look at the chinese economy over the last 10 years, a couple of things have happened. one thing is everyone went on to the smart phone platform. second, everyone went to buy their stuff online. what you will see over the next couple of years is people increasingly going to rely on home food delivery, rather than banning the restaurants. there is something very exciting and is happening. you can see clearly where this is going. it is an opportunity for this market. on the subject of opportunities, is the trade tension creating opportunities, or is it hurting performance? chris: with all of the news

flows, negative things on huawei and trade tensions, there is a lot of volatility in the market. markets very quality where the share price has gone down over this time. we think these are the mispriced situations. once people get over the fear , the stock prices will get back to what the interesting value points towards. we take a very low growth approach. we care and we are deploying capital at times like this to take it vantage of this situation. paul: how is the scene around china focused hedge funds? is it healthy for fundraising? chris: the demand is as strong as ever. years, chinese0 gdp is 11%.

the market has been flat. it's the second largest economy in the world. people say they need exposure. as a bigg at china thing, it does not help. look at the market. that's why investors have become more sophisticated. the same time, emerging breed of managers has come to the market looking at it. it goes through multiple cycles. it for the to create global demand. kathleen: i can understand taking a long view. there is concern about the global economy slowing, including china. particularly full-grown tariffs. they don't go away anytime soon. kenny hedge fund like yours ride out the decline in the stock market? it hits everybody.

when the tide goes up, a lot of both go down. can you afford that? does it start there for a while? chris: this is the new norm. the norm in chinese investing has been volatility. that's what at these times, you need to be able to import it to deploy. at the same time, the gdp never really helped the market. gdp, growthg about may potentially slow down. at the same time, we are looking for four or five ideas which we take advantage of the opportunities. we are very much agnostic to what is happening in the market. new investing am in china, you mentioned there are probably a lot of people saying they have a long view, i want to add china to my

portfolio, what kind of markers should i be watching? how do i know it's a good time to get in? chris: there's never a good time. at the same time, the focus on stocks. the ones looking for what a company manager can do to generate values to shareholders instead of what china can do. then you are on the right foot. kathleen: i hope your boat sales well. thank you so much chris. don't miss our exclusive live coverage from the conference in hong kong next week. more interviews with asia's leading investors, global market is, and investment ideas. up next, u.k. prime minister theresa may set to announce a timetable for her resignation. this is bloomberg.

haslinda: when averaged the end of the largest democratic exercise in the world. bloomberg tv will be live in mumbai to break down the numbers of the indian election. paul: this is "daybreak: asia." i am paul allen in sydney. kathleen: i'm kathleen hays in new york. theresa may is said to announce a timetable for her resignation as prime minister friday. she is facing growing pressure to abandon her latest break the proposal. let's bring in david finnerty. i can ask you the implications for sterling as theresa may plans to stand down. the basic question is what does this mean for brexit and politics of the u.k.? david: it is.

stirling is negative. if you think about how this will play out, the most probable is a very pro-brexit person will become leader, likely boris johnson. electedit is has to be by the party membership. put down to people. the party membership will vote. there's an interesting new poll out that says 66% of party membership wants a no deal brexit. any elected official will represent that. it might berd, boris johnson. no brexit deal is what they want. is you may not have enough votes to get it through parliament. stance, itexit deal is the default option. if boris johnson did become prime minister, he just has to get the full option and it happens.

give them au will next tension. there's no guarantee they will do that. if boris johnson says it's what they want, the eu may give it to them, or they may give another six months to get it lined up. six months down the line, same outcome, then there is a hard brexit. the probability is rising, which will continue toward sterling and the lows of 124-41 against the dollar being possible. paul: well all that is going on, what is the bank of england doing? is the course of ancient to stay -- action to stay while the dust settles? david: the bank of england is in a bind. governor probably says if it is smooth, the market may be underpricing the hikes. if there is a no deal brexit, it goes out the window. a catch for the bank of england is how to tell.

likely sterling gets weaker. there is an impact on output. if output is negative, you think it will lead to rate cuts. sterling inflation will lead to rate hike. we have to see how it plays out. rates or raiset rates, we have to see. kathleen: i think this is tougher. theresa may steps down, what does it mean for the dollar? strength in the near term. there are so many unknowns. david: there are quite a few. you think what the dollar is comprised of, go to the bloomberg dollar index. the euro and the pound, less than 42% by themselves. there is a no deal brexit. it is not good for sterling. it is not good for oil, either. mixed, thee data is most recent pmi data has not been good. a hard brexit would not help the

european economy. do you think the euro would be under pressure? sterling is under pressure. those combined would be dollar supportive by default. while the yen may benefit, the dollar should hold and edge higher. the because of the and sterling weakness. paul: david finnerty, thanks for joining us. do in japan this week not only to meet the prime minister, but also the emperor. trump's first foreign leader to visit japan since a new emperor took the throne. according to japanese officials, the business side will not be easy. the u.s. president is unlikely to resolve trade disputes involving automobile tariffs. joining us to discuss this is aged government editor john pesca pitch. trumpart of president getting some sort of arrangement on auto tariffs here?

>> i don't think we will see a specific deal. there are going to be talks related to his visit. it willve been reports be talks on the auto issue while trump is japan. the u.s. trade representative light howser is supposed to come in and have talks with his counterpart, the japanese economy minister. have somend japan sort of a deal in the works where the u.s. would avoid on japanese auto imports and japan would lower tariffs on u.s. agricultural products to levels it already has with other foreign producers under a revised trade deal, which the u.s. abandoned the tpp and japan signed it with several other countries. there is an inkling of a deal in the works. i don't think we will see a

signing of the arrangement while trump is here. it is not on the agenda. the talks are likely to take place in japan. it is quite big. japan, auto parts, and autos represent about 15 million -- $15 billion a year. the automotive industry is huge. really big in the u.s.. tens of thousands of americans employed in states across the country. the auto sector has a major impact at home in japan and the u.s.. kathleen: when i think about these trade talks, especially now, almost trump pitted himself more than ever against china. you would think in asia he could use some allies strongly, like prime minister abe. does that effect anything on where they stand in these trade talks with the u.s. and japan? >> i think the u.s. will find support in japan for getting china more towards the

international norms, in terms of trading economy. there will be cooperation. is a long, hasp endured through ups and downs. even if there are discussions, conflict friction on one side, there are so many areas of agreement and cooperation that there can be heated discussions on japan's last u.s. trade, and cooperation on what they are expecting from china. kathleen: thank you so much, bloomberg asia government editor john herskovitz. more on the trade wars later on. we talk with china's ambassador to the u.s.. that's at 7:30 tonight hong kong time. this is bloomberg. ♪

paul: a quick check of the latest business flash headlines. india's group is quitting asset management by selling shares in its joint venture on life insurance. it is valued about $615 million and takes their holdings through 75%. reliance capital will offer the rest of its stakes to other investors to make sure the minimum free flow requirement of 25%.

kathleen: facebook has removed more than 2 billion fake accounts in the first three months of the year. that's a record for the company. more than three times the amount at the same time last year. a vast majority pulled within minutes of being created. thanalso shut down more one point 5 million posts promoting or engaging in drug or gun sales. it's about to become easier to go diving at the great barrier reef. uber is launching a rideshare with a difference, allowing customers to book a submarine in australia. for 2000 u.s. dollars, it includes a regular pickup in a car, and a helicopter ride to the launch point, followed by a submarine ride. of course, the service will be called scuber. kathleen: a preview of what to watch in markets later this evening -- later this morning. sophie: to set the tone, a snapshot of tech favorites upon which fortunes have relied. alibaba on thend

index. they have less than a combined $170 billion in what has become a very painful meat. on thursday, they dropped more than 3% on huawei related sales concerns, which have dented the tie-in. we are getting more bearish signals for our chinese stocks after thursday's decline. the fall below its 100 day moving average. is building for chinese stocks listed in hong kong. since junet intense as investors look to trim exposure amid trade tensions. worse in asia. that they can down to the move my open and the win of modi. he is expected to keep handy, the fall in indian stocks and the rupee as investors shift focus on domestic risks, such as flagging economic growth and limited space for the administration. paul: thank you very much. before we hand over to "bloomberg markets: asia,"

let's look at how markets are trading. it will not surprise you to see all of that red. the nikkei off by three quarters of 1%. by one point 5%. in australia, the asx by three quarters of 1%. the energy sector dragging on things. stockssee oil and energy among the worst sufferers in the u.s.. let's check on futures trading. weekend.nto the long futures on the snp higher than a fifth of 1%. edging closer to the seven level. more to come in a moment. this is bloomberg. ♪

♪ nine lakh a.m. -- it is 9:00 a.m. welcome to "bloomberg markets: china open." trump turns upnt the heat. is dangerous. david: time running out for prime minister may. india shifts right as narendra modi celebrates a

victory, saying