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Asian markets retreat as trade deal euphoria fades

AFP  |  Hong Kong 

Asian markets fell Monday after Donald Trump's top downplayed the chances of a quick deal to end the China-US trade war, taking the wind out of the sails of last week's rally.

The US leader fuelled a surge in the region's equities Friday by tweeting that he had held positive talks with Chinese Xi Jinping, before a report said he had even asked officials to draw up a draft bill with an eye on a potential agreement.

But later tempered expectations, telling CNBC "there's no massive movement to deal with trade".

The sent US markets into the red, snapping a three-day rally on Wall Street, and sending Asian investors rushing for the door.

"Investors are far too wary of an empty promise," said Stephen Innes, of trade at

"But ultimately, they will need to decide how much of Trump's olive branch to was a ploy to boost equity markets ahead of the US mid-term elections on Tuesday and how much of it is a bona fide attempt to reach an agreement."

Hong Kong - which climbed more than four percent Friday in its best day for almost seven years - sank more than two percent, while ended down 0.4 per cent.

Dealers are keeping tabs on a massive import expo in that Xi opened Monday by telling delegates would increase efforts to open up its economy.

He said authorities would "step up" moves to stimulate domestic consumption of imports, lower tariffs, ease customs clearance procedures, and implement harsh punishments for intellectual property infringements, a key cause of Washington's anger with

finished 1.6 per cent lower, dropped 1.7 per cent and was 0.9 per cent off. and were also deep in negative territory, while dropped 0.5 per cent.

However, gained 0.8 per cent.

Traders are now keeping an eye on the US mid-term elections Tuesday, which are seen as a vote on Trump's performance since taking the White House, with the Democrats looking to take control of the

A win for them could also raise the chances of Trump being impeached, fuelling uncertainty.

"The mid-term elections carry a considerable amount of political and market risk not to mention legal risk for the current administration so that the markets could swivel higher or lower on the outcome of this election," Innes added.

On currency markets the dollar was holding up against the yen after Friday's US jobs data showed another blockbuster number of new positions created and the biggest jump in wages for nine years.

The data solidified expectations the Federal Reserve will press on with its interest rate hikes next month and into 2019.

However, the greenback was lower against the pound after a report in in Britain said had clinched a Brexit deal with the

slipped as the US reimposed sanctions on but with a number of countries including India, and possibly being given waivers to continue buying from the country.

Adding to the downward pressure are expectations that major producers and will ramp up their own exports to make up for the shortfall from

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, November 05 2018. 13:30 IST