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Asia markets down as US-China trade talks get under way
HONG KONG, July 31, 2019 (BSS/AFP) – Asia markets were down Wednesday with
talks underway in Shanghai in a bid to bring an end to the bruising yearlong
US-China trade war.
Washington and Beijing have so far hit each other with punitive tariffs
covering more than $360 billion in two-way trade.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven
Mnuchin will conclude two-day talks with their counterparts in China’s
financial capital on Wednesday.
But expectations began low and have taken a further hit after US President
Donald Trump launched an attack on Beijing’s negotiators which also rocked
Wall Street traders on Tuesday.
“My team is negotiating with them now, but they always change the deal in
the end to their benefit,” Trump tweeted.
Analysts said Trump’s remarks will do little to ease the already tense
relationship between Washington and Beijing.
His tweets gave “a stark reminder to investors that the US and China are
no closer to an agreement and in fact, might be drifting farther apart,” said
VM Markets Singapore managing partner Stephen Innes.
– Trade row fallout –
In other signs of fallout from the trade row, China saw its third straight
month of contraction in the manufacturing sector, despite Beijing’s efforts
to shore up the sector with tax cuts and better financing for small-to-medium
enterprises.
The Purchasing Managers’ Index (PMI), a gauge of Chinese factory
conditions, came in at 49.7 for the month, slightly above Bloomberg forecasts
but below the 50.0 mark denoting positive growth.
Shanghai was down 0.8 percent while Hong Kong fell 1.4 percent, after the
financial hub’s leader Carrie Lam signalled a second quarter of slow growth
ahead of official GDP figures on Wednesday.
There was “no room for optimism for the second quarter and the entire
year”, Lam said in a statement to business leaders Tuesday.
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The trade dispute with Washington has weighed on the city as it reels from
seven weeks of civil unrest and mass protests — some of which have ended in
violence — triggered by a controversial bill which would have allowed
extraditions to mainland China.
Korean stocks were battered in morning trade with Seoul down more than 1.0
percent after Samsung Electronics reported a 53 percent drop in net profits.
The world’s biggest smartphone and memory chip maker is facing headwinds
as a result of a simmering dispute between South Korea and Japan, which has
seen Tokyo impose restrictions on chemical exports crucial to Samsung’s key
products.
Tokyo’s benchmark Nikkei was down by 1.0 percent overall but entertainment
giant Sony soared 6.5 percent after the entertainment giant on Tuesday
reported higher operating profit for the first quarter thanks to strong
demand for its image sensors.
Elsewhere, Sydney was down 0.2 percent, Taiwan fell 0.5 percent and Mumbai
dropped 0.8 percent.
– Key figures around 0250 GMT –
Tokyo – Nikkei 225: DOWN 1.0 percent at 21,497.99
Hong Kong – Hang Seng: DOWN 1.4 percent at 27,760.25
Shanghai – Composite: DOWN 0.8 percent at 2,928.53
Pound/dollar: UP at $1.2153 from $1.2151 at 2040 GMT
Euro/pound: UP at 91.78 pence from 91.51 pence
Euro/dollar: UP at $1.1154 from $1.1142
Dollar/yen: DOWN at 108.55 yen from 108.77 yen
Brent North Sea crude: UP 47 cents at $65.19 per barrel
West Texas Intermediate: UP 38 cents at $58.43 per barrel
New York – Dow: DOWN 0.1 percent at 27,198.02 (close)
London – FTSE 100: DOWN 0.5 percent at 7,646.77 (close)
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