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Stocks extend decline as trade woes batter sentiment

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A digital board displays stock information at a brokerage office in Beijing
A digital board displays stock information at a brokerage office in Beijing   -   Copyright  REUTERS/Thomas Peter
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Stocks extended their slump in early Asian trade on Monday, with U.S. equity futures off to a softer start for the week as worries over U.S.-China trade tensions battered investor sentiment.

S&P futures were down 0.6 percent and the Dow futures lost 0.7 percent, while Australian stocks <.AXJO> declined 0.9 percent.

White House trade adviser Peter Navarro's comments that U.S. officials would raise tariff rates on Chinese imports if the two countries could not come to an agreement during a 90-day negotiating period fanned fresh concerns over U.S.-China trade relations.

Markets were already reeling on news last week that Canadian officials had arrested the chief financial officer of Chinese smartphone maker Huawei for extradition to the United States. The arrest was seen as an added threat to the resolution of a trade war between the world's top two economies.

Wall Street's main indexes fell more than 2 percent on Friday in a broad sell-off, posting their largest weekly percentage drops since March. [.N]

The dollar was on the backfoot after Friday's soft U.S. jobs report raised worries that economic growth is moderating and the Federal Reserve may pause its tightening cycle sooner than previously thought.

The dollar was down 0.25 percent at 112.45 yen and the euro added 0.2 percent to $1.1404 .

Other data straddling the weekend showed China reporting far weaker than expected November exports and imports, underscoring slower global and domestic demand and raising the possibility authorities will take more measures to keep the country's growth rate from slipping too much.