Asia market trends Thursday: Optimism over US-China trade talks may fade

Stock ticker at SGX building on Shenton Way; taken October 2018.Stock ticker at SGX building.

Asian markets may stumble on Thursday after a days-long rally, with Japan’s shares opening lower as regional traders may not share Wall Street’s unfettered optimism over whether U.S.-China trade talks could lead to a rapprochement in the Trump administration’s trade war.

U.S. officials used the three days of trade talks with China to seek more detail on the mainland’s promise to buy more American products and to push for changes to industrial policies, Reuters reported on Wednesday. The talks had been extended to a third day, with U.S. officials citing signs of progress on the purchases of American goods, while issues related to structural reforms in China were less productive, Reuters reported, citing people familiar with the talks.

U.S. President Trump also issued an uncharacteristically short statement over Twitter saying the talks had been going well.

 

Analysts pointed to progress in the trade talks as a driver of Wall Street’s nascent recovery from its recent rout.

“The president’s tweet this morning [Tuesday] about how the negotiations with China are still moving ahead may be the key on whether the stock market recovery will continue,” Chris Rupkey, chief financial economist at MUFG Union Bank, said in a note on Wednesday. “Our bet is that the president will cut a deal with China in the days and weeks ahead to keep the U.S. economy on the recovery track this year where growth may break the ten year record from the Clinton years.”

Indexes

March futures for Japan’s Nikkei 225 index were down 5 points at 20,290 at 7:51 A.M. SGT, according to CME data; that compared with the index’s close on Wednesday at 20,427.06. The index opened down 0.74 percent.

Singapore’s Straits Times Index was up 1.13 percent at 3158.07 on Wednesday; January futures for the index were at 3158 on Wednesday, while February and March futures were at 3161 and 3158.

Hong Kong’s Hang Seng Index added 2.27 percent to 26,462.32 on Wednesday, while China’s CSI 300 gained 1.01 percent to 3078.476.

Malaysia’s KLCI ended Wednesday down 0.29 percent at 1667.83, while Indonesia’s IDX Composite edged up 0.15 percent at 6272.24.

The Dow Jones Industrial Average rose 0.39 percent to 23,879.12, the Nasdaq Composite tacked on 0.87 percent to 6957.077, and the S&P 500 gained 0.41 percent to 2584.96. Futures for the three indexes were nose down in early trade.

Oil

Nymex WTI crude oil futures for February were down 0.52 percent at US$52.09 a barrel at 7:14 A.M. SGT, while ICE Brent crude futures for March jumped 4.63 percent to US$61.44 a barrel by 6:37 A.M. SGT, according to Bloomberg data.

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