Asia Markets: Asian markets fall on diminished hopes of U.S.-China trade deal
Asian markets fell in early trading Wednesday, after President Donald Trump poured cold water over optimism for a trade deal as negotiations between the U.S. and China resumed.
In a series of tweets Tuesday morning, Trump criticized China for not buying more American agricultural products, and took credit for its slowing economy. He also said China was hoping to wait until after the 2020 election to make a trade deal, but vowed that terms of any such deal would be much tougher after he is re-elected. Even before Trump’s comments, there had been modest expectations for the new trade talks, with little chance seen of a breakthrough.
Meanwhile, investors were expecting the U.S. Federal Reserve to cut interest rates for the first time since 2008 later Wednesday.
Japan’s Nikkei slid 1% NIK, -0.70% and Hong Kong’s Hang Seng Index HSI, -1.11% fell 1.3%. The Shanghai Composite SHCOMP, -0.53% retreated 0.8% while the smaller-cap Shenzhen Composite 399106, -0.48% lost 0.5%. South Korea’s Kospi 180721, -0.51% fell 1% as North Korea tested more short-range ballistic missiles, and benchmark indexes in Taiwan Y9999, -0.07% , Singapore STI, -0.11% and Indonesia JAKIDX, -0.34% all fell. Australia’s S&P/ASX 200 XJO, -0.21% slipped 0.2%.
Among individual stocks, Samsung 005930, -2.15% fell in South Korea after reporting a steep decline in second-quarter net profit. Fast Retailing 9983, -1.48% and SoftBank 9984, -1.25% fell in Tokyo trading, while Sony 6758, +5.10% surged after beating earnings expectations. In Hong Kong, insurer AIA Group 1299, -1.76% dropped, as did property developer Country Garden 2007, -2.39% , and iPhone component makers AAC 2018, -1.84% and Sunny Optical 2382, -1.28% after Apple posted slower iPhone sales. Apple AAPL, -0.43% manufacturer Foxconn 2354, +0.16% fell in Taiwan. In Australia, Beach Energy BPT, +1.19% rose.
On Wall Street, a mixed batch of corporate earnings helped drag indexes slightly lower Tuesday, pulling the market farther from its recent record highs for the second straight day.
The S&P 500 index SPX, -0.26% fell 7.79 points, or 0.3%, to 3,013.18. Despite its two-day slide, the benchmark index remains within 0.4% of its all-time high set on Friday. The Dow Jones Industrial Average DJIA, -0.09% dropped 23.33 points, or 0.1%, to 27,198.02. The Nasdaq composite COMP, -0.24% slid 19.71 points, or 0.2%, to 8,273.61.
The Fed is widely expected to cut its benchmark interest rate for the first time in a decade. The Fed has decided that a rate cut now — and possibly one or more additional cuts to follow — could help inoculate the economy against a potential downturn.
“It’s Fed day and I honestly can’t bring myself to repeat what was already said on Monday and Tuesday other than ‘Yes, the Fed will cut but it won’t be enough,’ “ according to RaboResearch.
Also weighing on investor sentiments is the ongoing trade spat between South Korea and Japan. Japan has decided to deprive South Korea of so-called “white country” preferential trade status.
Benchmark crude oil CLU19, +0.67% added 36 cents to $ 58.41 a barrel. It rose $ 1.18 to $ 58.05 a barrel Tuesday. Brent crude oil BRNV19, +0.87% , the international standard, gained 53 cents to $ 65.16 a barrel.
The dollar USDJPY, -0.03% inched down to 108.52 Japanese yen from 108.59 yen Tuesday.