Asian stocks lower amid uncertainty over US-China trade

09-Nov-2019 Intellasia | AP | 6:02 AM Print This Post

Asian stock markets were mostly lower Friday amid uncertainty about a possible US-Chinese agreement to roll back tariffs in their trade war.

Tokyo rose after Beijing said Thursday the two sides agreed to the step if they make progress on an interim deal. Shanghai was little changed, while Hong Kong and Southeast Asian markets declined amid concern about possible opposition within the White House.

If the deal pans out, “it will be an emphatic upside surprise for the global economy,” said Vishnu Varathan of Mizuho Bank in a report.

However, “we cannot rule out a gap” between the US and Chinese positions, Varathan warned. And he said the Federal Reserve might turn “less dovish” if the deal “takes off with more promise than anticipated” and tariffs fall, easing pressure on US economic growth.

The Shanghai Composite Index lost 0.1 percent to 2,975.09 while Hong Kong’s Hang Seng tumbled 0.6 percent to 27,664.54. Tokyo’s Nikkei 225 advanced 0.3 percent to 23,391.87.

Seoul’s Kospi sank 0.3 percent to 2,139.11 and Sydney’s S&P-ASX 200 was off 2 points at 6,724.10. New Zealand gained while Taiwan and most Southeast Asian markets declined.

On Wall Street, the benchmark Standard & Poor’s 500 index gained 0.3 percent to a record 3,085.18. It was up 0.7 percent at one point. The Dow Jones Industrial Average climbed 0.7 percent to a record 27,674.80.

The Nasdaq composite finished just shy of its all-time high after rising 0.3 percent to 8,434.52.

Encouraging reports on the US economy and corporate profits have helped drive stocks back to record heights. The job market is strong, and the Fed has cut interest rates three times.

That leaves the US-Chinese trade war as the wild card for the global economy.

Trump announced a “Phase 1″ agreement in October but the two sides still are negotiating the details. They have yet to announce progress on major disputes about China’s trade surplus and technology policy.

The two biggest global economies have raised tariffs on billions of dollars of each other’s goods. That has disrupted supply chains, threatening to chill worldwide economic growth.

Investors were encouraged when the Chinese Commerce Ministry said Thursday the two sides agreed to a “phased reduction” of punitive tariffs if the deal goes ahead. But enthusiasm was tempered by concern critics in the White House might oppose such a step. A person who was briefed on the talks Thursday told The Associated Press there were still deliberations in the White House about how far to roll back the tariffs.

ENERGY: Benchmark US crude fell 24 cents to $56.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 80 cents on Thursday to close at $57.15. Brent crude, used to price international oils, declined 14 cents to $62.15 per barrel in London. It advanced 55 cents the previous session to $62.29.

CURRENCY: The dollar declined to 109.24 yen from Thursday’s 109.28 yen. The euro was unchanged at $1.1051.


Category: FinanceAsia

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