Asia markets fall as attention turns to talks
ASIAN markets mostly fell on Tuesday as trade issues returned to the spotlight with China and the US holding more high-level talks this week, while oil prices held gains as tensions in the Middle East simmer.
A run-up in equities over the past week has also led to profittaking, with Hong Kong hit after six straight days of gains.
US markets rose again as Chinese Vice Premier Liu He – President Xi Jinping’s right-hand man on economic issues – headed to Washington on Tuesday for a new round of talks aimed at heading off a trade war between the economic giants.
There are hopes the two sides can hammer out an agreement to end a dispute that has seen both sides threaten tariffs on billions of dollars of goods.
Donald Trump’s call to help get Chinese telecom equipment maker ZTE “back into business fast” soothed nerves, while Commerce Secretary Wilbur Ross on Monday said he was exploring “alternative remedies” for the firm, which was in April banned from buying crucial US technology for seven years.
“China is reportedly close to removing tariffs on agricultural products in exchange for relief for ZTE,” said Stephen Innes, head of Asia-Pacific trade at Oanda.
“It helps explain why President Trump said he’d work with President Xi on this company.”
The talks come as US officials try to reach agreements with Canada and Mexico on revising their three-way trade pact, while EU steel tariff exemptions are due to end on June 1.
‘Gains capped’
Hong Kong closed 1.2 percent lower after racking up gains of more than 5 percent over the previous six sessions, while Tokyo ended 0.2 percent down.
Sydney shed 0.6 percent, Singapore fell 0.4 percent and Seoul sank 0.7 percent, with Wellington, Taipei, Bangkok and Jakarta also lower.
However, there were gains in Manila and Kuala Lumpur.
And Shanghai rose 0.6 percent as global index compiler MSCI said 234 mainland shares would be on a final list to be included in its flagship index from next month. The big-cap shares, from banking giant ICBC to oil major PetroChina, will account for 0.39 percent of the MSCI Emerging Markets Index.
But analysts said gains were capped as investors have already bought these shares in anticipation of the June inclusion.
Mumbai’s Sensex jumped 0.5 percent as Prime Minister Narendra Modi’s BJP looked on course to win a key state election just a year before national polls.
In early European trade, London and Paris each fell 0.2 percent, while Frankfurt shed 0.3 percent.