Asian markets retreat as uncertainty over U.S.-China trade deal grows

Asian markets retreat as uncertainty over U.S.-China trade deal grows

Stocks in Tokyo, Hong Kong sink, following Wall Street’s lead

Asian shares were mostly lower Thursday as optimism about progress in trade talks between the U.S. and China started wearing off.

Japan’s benchmark Nikkei 225 NIK, -0.65% slipped 0.8% in early trading. Australia’s S&P/ASX 200 XJO, +0.29% edged up nearly 0.3% while South Korea’s Kospi SEU, -0.45% was slightly lower. Hong Kong’s Hang Seng HSI, -0.89% dipped 0.5% while the Shanghai Composite SHCOMP, +0.14% was about flat.

Among individual stocks, Renesas Electronics 6723, -14.62% plunged in Tokyo trading after a report that the chip maker will partially halt production for two months, citing a slowdown in demand from China. Robotics maker Fanuc 6954, -2.80% fell as well, along with Nintendo 7974, -1.93% . In Hong Kong, ever-volatile Sunny Optical 2382, -5.61% and AAC 2018, -3.89% shares dropped, while real-estate stocks gained. Samsung 005930, +1.02% advanced in Korea, while Rio Tinto RIO, -4.76% slid in Australia.

On Wall Street, health care companies led U.S. stocks broadly lower Wednesday, giving the market its third straight loss. Technology and energy stocks also bore the brunt of the selling, offsetting gains in materials and utilities companies. Several retailers also rose. Smaller companies fell more than the rest of the market.

The S&P 500 SPX, -0.79% dropped 18.20 points, or 0.7%, to 2,771.45. The benchmark index is now on track for its first weekly decline since January. The Dow Jones Industrial Average DJIA, -0.98% fell 133.17 points, or 0.5%, to 25,673.46. The Nasdaq composite COMP, -0.86% lost 70.44 points, or 0.9%, to 7,505.92.

Disappointing economic reports, uncertainty over trade and fears of a slowdown in economic growth have been weighing on the market the past couple weeks.

“Regional stock markets will likely endure a tough start to the day following the dismal showing overnight by Wall Street. World growth and tariff fears are likely to be on investors’ lips and will cap rallies in stocks during the Asian session,” said Jeffrey Halley, senior market analyst at OANDA.

At times, the market has also drawn optimism over the prospects that the U.S. and China will resolve their trade dispute. U.S. and Chinese officials have hinted that some kind of agreement could be finalized by the end of March, with President Donald Trump and President Xi Jinping possibly meeting to formalize the deal at Trump’s private club in Mar-a-Lago, Florida.

Last year, Trump imposed a series of tariffs on Chinese goods in hopes of pressuring Beijing to support more favorable terms for the United States. In June, the White House levied import taxes of 25% on $50 billion of Chinese imports. It followed in September with 10% duties on an additional $200 billion.

Asian investors were also staying cautious ahead of a European Central Bank board meeting later in the global day.

U.S. crude CLJ9, +0.84% gained 15 cents to $56.37 a barrel. It slid 0.6 percent to settle at $56.22 a barrel in New York Wednesday. Brent crude LCOK9, +0.39% , used to price international oils, was also higher, adding 29 cents to $66.28 a barrel in London.

The dollar USDJPY, -0.24% fell to 111.66 yen from 111.86 yen Wednesday.

Scroll Up
error: Content is protected !!