TOKYO, Oct 28: Asian shares were mixed on Tuesday, with Chinese markets gaining as investors watch to see what might come of a planned meeting between President Donald Trump and China’s top leader.
Hong Kong’s Hang Seng edged 0.1 per cent higher to 26,451.08 and the Shanghai Composite index gained 0.2 per cent to 4,005.44, its highest level in a decade.
Trump has suggested he expects to forge another trade agreement with Chinese President Xi Jinping when they meet on the sidelines of a Pacific Rim summit in South Korea later this week. That could alleviate trade tensions that have roiled world markets and disrupted business since Trump’s return to the White House.
Japan’s benchmark Nikkei 225 lost 0.2 per cent in early trading to 50,419.96, falling back after hitting record highs since Sanae Takaichi became prime minister, the nation’s first woman leader.
On Tuesday, Trump is meeting with Takaichi, visiting a US military base and then meeting with business leaders in Tokyo. Both sides are reaffirming their security alliance and Japan is promising to abide by Trump’s demands for more investments, and bigger role in its own defence and increased imports from the US.
“So Asia opens not with fireworks, but with an uneasy calm — a market breath half held. Traders aren’t chasing the rumour this time; they’re watching, weighing, waiting for something real to sign,” said Stephen Innes, managing partner at SPI Asset Management.
Australia’s S&P/ASX 200 fell 0.4 per cent to 9,017.80. South Korea’s Kospi shed 1.2 per cent to 3,992.77 after the nation reported relatively strong quarterly economic growth thanks to strong consumption, investments and exports.
On Wall Street, stocks climbed to more records on Monday ahead of a week packed with potentially market-moving events. The S&P 500 rose 1.2 per cent to 6,875.16. The Dow Jones Industrial Average added 0.7 per cent to 47,544.59, and the Nasdaq composite jumped 1.9 per cent to 23,637.46.
The US stock market has been on a record-breaking rally. The S&P 500 has shot up a stunning 38 per cent since hitting a low in April, when worries about Trump’s tariffs on China and other countries were at their peak. Besides hopes for easing trade tensions, the rally has also been built on expectations for several more things to happen.
One is that the Federal Reserve will keep cutting interest rates in order to give the slowing job market a boost. The Fed’s next announcement on interest rates is due on Wednesday, and the nearly unanimous expectation among traders is that it will cut the federal funds rate by a quarter of a percentage point at a second straight meeting.
It’s not a certainty though, because the Fed has also warned it may have to change course if inflation accelerates beyond its still-high level. That’s because low interest rates can make inflation worse.
Besides lower interest rates, another expectation that’s propped up stock prices is the forecast that US companies will continue to deliver solid growth in profits. Some of Wall Street’s most influential stocks are set to report their results this week, including Alphabet, Meta Platforms and Microsoft on Wednesday, and Amazon and Apple on Thursday.
In the bond market, the yield on the 10-year Treasury eased to 3.99 per cent from 4.02 per cent late Friday.
In energy trading, benchmark US crude slipped 3 cents to USD 61.28 a barrel. Brent crude fell 2 cents to USD 64.86 a barrel.
In currency trading, the US dollar dropped to 152.41 Japanese yen from 152.88 yen. The euro cost USD 1.1658, up from USD 1.1645. (AP)
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