GLOBAL MARKETS: Asian shares, yuan off to calm start; focus on China

GLOBAL MARKET - TOKYO. Asian shares and the Chinese yuan were off to a cautious start on Monday as investors looked to how Chinese financial markets will react to the news the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.11% while Japan's Nikkei shed 0.61%. U.S. stock futures gained 0.24% in early trade, paring back almost a half of Friday's 0.53% fall in the index.

The offshore Chinese yuan was little moved at 7.1339 yuan per dollar, off Friday's three-week low of 7.1520 to the dollar.

Chinese share markets will trade only on Monday this week ahead of China's National Day holiday, which runs until Oct. 7.

Risk assets took a hit in U.S. trade on Friday following the news that the Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from U.S. stock exchanges.

The report knocked Chinese shares listed on U.S. exchanges, with Alibaba Group Holding falling 5.15% and JD.com 5.95% on Friday.

The delisting of Chinese companies from U.S. stock exchanges was part of a broader effort to limit U.S. investment in Chinese companies, two sources briefed on the matter told Reuters.

"While China runs a current account surplus and is a net creditor nation, Chinese companies are net debtors and rely on foreign capital," Koji Fukaya, president of Office Fukaya Consulting.

"Washington seems to be trying to limit Chinese companies' activities by putting pressure on their funding," he said.

Still, with trade talks between the United States and China expected to be held Oct. 10-11, many market players are sticking to hopes such drastic measures on capital markets could be avoided.

"At this point, markets will have to wait and see. Of course we need to be guarded against more crazy headlines, but this week could be a bit calmer given holidays in China. Economic data will likely be the main driver for markets," said Kyosuke Suzuki, director of forex at Societe Generale.

Surveys on Chinese companies are due on Monday while in the United States, key business sentiment data and an employment report will be closely scrutinised on clues on how the economy is faring in the face of the ongoing tussle with China.