Asia shares round out rough week with losses

HONG KONG — Fresh political turbulence in Washington and renewed fears over US-China relations pushed Asian markets lower Friday, as a global slump sparked by unease over Fed policy showed no signs of easing.

The resignation of US Defense Secretary Jim Mattis -- seen as a moderating force on an often impulsive president -- and the looming threat of a federal government shutdown alarmed investors as concern grows over weakening global growth.

Shares turned sharply lower after President Donald Trump hardened his demand Congress fund a US-Mexico border wall, plunging Washington into chaos and leaving the US government on the verge of a Christmas shutdown.

Rising tension between the world's two largest economies also unnerved markets, with China hitting back at the US after the Justice Department indicted two alleged Chinese hackers accused of having ties to Beijing's security services.

US officials said the indictment showed President Xi Jinping had not fulfilled his pledge to stop cybercrime, but China accused the US of "fabricating facts" and warned Washington to drop the prosecution.

The spat sparked fears that efforts to resolve a simmering trade conflict may yet be derailed.

"A potential US government shutdown and US accusations of Chinese hacking fuelled existing market concerns about economic growth," said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking.

Crude added to anxiety on financial markets, with the American benchmark at one point sinking below $46 a barrel, its lowest level since July 2017.

Both WTI and Brent recovered some losses in Asian trade Friday, but analysts say fears over demand and oversupply are likely to continue downward pressure on prices.

"To say things are a bit negative out here could be a significant understatement... compounded by OPEC's seemingly rudderless efforts in these turbulent waters," said Stephen Innes, head of Asia-Pacific trade at OANDA.

He added "the latest production cuts are not sufficient to right the ship".