HONG KONG, Feb 22, 2019 (BSS/AFP) – Asian markets mostly fell Friday,
tracking losses on Wall Street as optimism over the China-US trade talks was
trumped by a weak round of US data that revived concerns about economic
growth.
With high-level negotiations between the world’s top economies still
taking place in Washington there has been little concrete news about their
progress, though some reports have said the two are heading towards an
eventual deal.
The lack of information on the crunch talks led dealers in New York to
take their cue from figures showing home sales at a three-year low, while
sales of durable goods missed expectations. All three main indexes on Wall
Street ended lower.
The data, coupled with disappointing readings from the eurozone and Japan,
reminded investors that while China and the US are showing signs of reaching
a deal, the world economy continues to stutter.
“Trade talks remain on track, but with little details on what the next
moves are as the March 1 deadline approaches, the market paid more attention
to the lower-than-expected US data on Thursday,” said OANDA senior market
analyst Alfonso Esparza.
The losses on Wall Street filtered through to Asia, where markets have
enjoyed a broadly healthy week.
Tokyo ended the morning down 0.4 percent, Hong Kong slipped 0.6 percent
and Shanghai eased 0.3 percent, while Seoul and Singapore each retreated 0.4
percent.
Taipei and Jakarta were also down, though Sydney and Wellington rose.
– ‘Don’t chase the rally’ –
And Richard Turnill, global chief investment strategist at BlackRock,
warned that the stellar gains seen so far this year were unlikely to continue
for the next 10 months.
“Don’t chase the rally,” he told Bloomberg TV. “Don’t extrapolate the
double-digit gains we’ve seen in the first six weeks of this year.”
On Thursday China’s Commerce Ministry said the two sides would “go a step
further in deepening their communication” regarding the trade talks but
despite Donald Trump’s tweets that things are going well, there is scepticism
among observers.
“I think the consensus of people that have been following this thing is
that they’re not making nearly as much progress as the president tweets that
they’ve been making,” said William Reinsch, a former US trade official now at
the Center for Strategic and International Studies.
With the March 1 deadline approaching, China’s top negotiator Liu He is
reported to be planning to meet Trump on Friday.
On currency markets the dollar held gains against most other currencies as
the soft US data sparked a shift by investors towards the safer option, while
the pound remains under pressure from ongoing Brexit uncertainty.
The Australian dollar was down but recovered pared losses that came on the
back of a report that China had banned coal imports from the country, with
tensions between the two becoming strained over Canberra’s decision to ban
telecoms giant Huawei’s 5G equipment over security risks.
However, Treasurer Josh Frydenberg played down the reports, insisting no
coal import ban had been put in place.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.4 percent at 21,374.77 (break)
Hong Kong – Hang Seng: DOWN 0.6 percent at 28,468.97
Shanghai – Composite: DOWN 0.3 percent at 2744.80
Euro/dollar: DOWN at $1.1338 from $1.1342 at 2140 GMT
Pound/dollar: DOWN at $1.3035 from $1.3037
Dollar/yen: UP at 110.70 yen from 110.69 yen
Oil – West Texas Intermediate: DOWN two cents at $56.94 per barrel
Oil – Brent Crude: DOWN eight cents at $66.99 per barrel
New York – Dow: DOWN 0.4 percent at 25,850.63 (close)
London – FTSE 100: DOWN 0.9 percent at 7,167.39 (close)