BEIJING: Asian stocks mixed after Trump trade deal remark

Chinese men monitor stock prices on computer terminals at a brokerage in Beijing. Asian stock markets followed Wall Street higher yesterday after US President Donald Trump suggested a costly tariff war with China could be resolved soon. PHOTO: AP

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BEIJING (AP) – Asian stock markets were flat to lower yesterday after United States (US) President Donald Trump suggested a costly tariff war with China could be resolved soon.

Markets in Japan, South Korea and Hong Kong rose in early trading but gave up their gains by midday. Shanghai declined as traders took profits ahead of a weeklong holiday.

US stocks rebounded on Wednesday after Trump told reporters China wants “to make a deal very badly” and it “could happen sooner than you think”.

“Investors have been ‘trade war’ bearish for so long that any sliver of optimism is cheered,” said Stephen Innes of AxiTrader in a report.

Tokyo’s Nikkei 225 was up 0.1 per cent at 22,048.24 while Hong Kong’s Hang Seng gained 4.6 points to 25,945.67.

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The Shanghai Composite Index lost 0.7 per cent to 2,935.98. Traders took profits before trading halts next week for the National Day holiday following an extended rise in prices, especially for tech stocks.

“To avoid uncertainty, funds will sell and pocket their money,” the China Securities Journal said on its website.

Seoul’s Kospi was up one point at 2,072.43 while Sydney’s S&P-ASX 200 retreated 0.5 per cent to 6,674.80. India’s Sensex added one per cent to 38,996.36.

Taiwan gained while Singapore and New Zealand retreated.

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The US-Chinese dispute over Beijing’s trade surplus and technology ambitions has fuelled anxiety the global economy could tip into recession. Both sides have raised tariffs on billions of dollars of each other’s goods, hurting factories and farmers on both sides.

Negotiators are due to meet next month in Washington for a 13th round of talks. Economists said a temporary deal is possible but a final settlement is unlikely this year.

Trump signed a trade deal with Prime Minister Shinzo Abe of Japan on Wednesday that covers farm, industrial and digital trade but leaves tariffs on autos and parts at 2.5 per cent.

That prompted Japanese automakers to appeal to their government for more support. The deal caps negotiations that began last year after Trump complained about Japan’s trade surplus with the US and threatened higher tariffs and other measures.

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The deal with Japan “suggests the president is open to an ‘interim’ trade deal, possibly signalling he is willing to negotiate one with China,” said Innes.

On Wall Street, the benchmark Standard & Poor’s 500 index gained 0.6 per cent to 2,984.87. The Dow Jones Industrial Average gained 0.6 per cent to 26,970.71. The Nasdaq climbed 1.1 per cent to 8,077.38.

Markets rose despite the release of a summary of a July phone call between Trump and Ukraine’s President that is at the centre of a congressional impeachment inquiry into the American leader. Investors “largely shrugged off Trump’s impeachment proceedings,” said Mizuho Bank in a report.

The broader market was coming off its worst day of the month, when a weak consumer confidence report, more trade war rhetoric and the start of the impeachment inquiry rattled investors.

The congressional probe might complicate White House efforts to resolve trade disputes with China and other nations.

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ENERGY: Benchmark US crude lost 15 cents to USD56.34 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 80 cents on Wednesday to close at USD56.49. Brent crude, used to price international oils, shed 16 cents to USD61.27 per barrel in London. The contract declined 69 cents the previous session to USD61.43.

CURRENCY: The dollar declined to 107.65 yen from Wednesday’s 107.75 yen. The euro gained to USD1.0951 from USD1.0944.

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