Asian shares slide on trade disappointment, HK unrest

Asian stocks and Wall Street futures fell on Wednesday, as growing worries that U.S.-China trade talks are stalling and concern about intensifying unrest in Hong Kong hurt demand for risky assets. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.01% to the lowest in more than a week. Hong Kong shares slumped 1.8% to a two-week low, battered by fears that anti-government protests appear to be spiraling out of control.

The dollar drifted in Asia after U.S. President Donald Trump said a trade deal was "close" but gave no new details on when or where an agreement would be signed, disappointing investors in what was billed as a major speech on his administration's economic policies. Trump also rattled some investors by threatening China with even more tariffs if they do not sign a deal.

Oil prices fell as diminishing prospects for an immediate resolution to a 16-month long trade war between the world's two-largest economies suggested less demand for energy in the future.

Expectations for a "phase one" trade deal some time this month have been a key factor supporting stocks and riskier assets recently. However, the lack of material progress on an agreement has only increased doubts about whether a trade deal will take place at all.

"I'm absolutely concerned. The clock is ticking," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"Markets are now expecting substantial progress in the next week or so, and if not, then confidence could crumble. There are diverging interpretations of Trump's comments. I tend to go with commodities like oil and copper because they are plugged in to global demand, so their fall is significant."

U.S. stock futures fell 0.27% in Asia after the S&P 500 eked out a 0.16% gain. The S&P 500 and Nasdaq hit alltime peaks during trading but stocks ended off session highs after Trump's speech.

Washington and Beijing have imposed tariffs on each other's goods in a bitter dispute over Chinese trade practices that the Trump administration says are unfair.

The standoff has roiled global financial markets and raised the risk of recession for some economies as global trade slows.

In recent weeks, both sides have indicated they were making progress toward an agreement that would potentially scale back some tariffs, but a lack of additional information is starting to unsettle some investors in equities and other riskier assets.

In a reminder of the potential for further friction, Trump said he would raise tariffs on Chinese goods "very substantially" if China does not agree a deal. "And that's going to be true for other countries that mistreat us too," he added.

Hong Kong stocks slumped as protesters planned to paralyze parts of the Asian financial hub for a third day, with transport, schools and many businesses closing after violence escalated across the city.

Protesters and police battled through the night at university campuses and other locations only hours after police Senior Superintendent Kwong Wing-cheung said the Chinese-ruled city had been pushed to the "brink of a total breakdown".

The former British colony has been rocked by nearly five months of protest against Chinese rule, and there is growing concern that the chances of a crackdown by Beijing are rising.

Chinese shares fell 0.4%, while Japanese shares skidded 1.02%.