Asian markets mixed after Wall Street high
Asian stock markets were mixed Thursday amid doubts about the status of a U.S.-Chinese trade deal after the U.S. Federal Reserve’s chairman said it is likely to leave its benchmark interest rate unchanged.
Investors were wary after The Wall Street Journal reported Chinese negotiators were reluctant to commit to the size of purchases of U.S. farm goods in an interim agreement aimed at ending a tariff war.
President Donald Trump said last month Beijing would buy up to $50 billion of soybeans and other American farm goods. Chinese officials have never confirmed that.
Investors are cautions “seemingly on the lack of good news on trade talks with China,” said Stephen Innes of AxiTrader in a report.
“It’s more about China getting locked into a numerical commitment as opposed to balking at the deal,” said Innes. “This is something that needs to get ironed out and certainly not a bridge too far.”
Meanwhile, Fed Chairman Jerome Powell said he expects the U.S. economy to keep growing at a solid pace but faces risks from slower global growth and trade tension.
The Fed cut short-term rates last month for the third time this year, to a range of 1.5% to 1.75%.
Tokyo’s Nikkei 225 lost 1.0% to 23,089.07 and Hong Kong’s Hang Seng fell 0.9% to 26,326.24. The Shanghai Composite Index edged 0.1% higher to 2,907.23.
Seoul’s Kospi edged up 0.2% to 2,126.10 while Sydney’s S&P-ASX 200 gained 0.5% to 6,730.50. Taiwan and Southeast Asian markets declined while New Zealand advanced.
On Wall Street, buying focused on safe-play stocks such as utilities, real estate companies and makers of consumer products that tend to pay higher dividends. Banks, industrial stocks and companies declined.
The benchmark Standard & Poor’s 500 index rose 0.1% to 3,094.04, a record. The Dow Jones Industrial Average gained 0.3% to 27,783.59, also a record. The Nasdaq dropped 0.1% to 8,482.10.
China’s government reported Thursday that factory activity and spending weakened more than expected in October.
Growth in industrial production slowed to 4.7% from September’s 5.8%.
Retail sales growth weakened to a six-month low of 7.2% over a year earlier from September’s 7.8%. Investment in factories, real estate and other fixed assets rose 5.2% in the first 10 months of the year, down from 5.4% in the nine months through September.
Japanese data showed economic growth slowed to 0.1% over the previous quarter in the three months ending in September from the previous quarter’s 0.4%. Consumption growth weakened to 0.4% from 0.5%.
The slowdown “isn’t too worrying as it reduces the likelihood of a slump in output” after a sales tax hike takes effect in October, said Marcel Thieliant of Capital Economics in a report.
Also Thursday, Australia’s government reported employment fell by a bigger-than-expected margin in October. That prompted expectations the central bank will cut interest rates to prop up economic growth.
ENERGY: Benchmark U.S. crude rose 31 cents to $57.43 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 32 cents on Wednesday to close at $57.12. Brent crude, used to price international oils, advanced 24 cents to $62.61 per barrel in London. It gained 29 cents the previous session to $62.37.
CURRENCY: The dollar declined to 108.68 yen from Wednesday’s 108.84 yen. The euro declined to $1.1006 from $1.1007.
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