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Asian stocks slip on worries over US-China tariffs truce

Vincent Napolitano Vincent Napolitano | Photo: AP.

December 03, 2018 10:52 PM

SINGAPORE (AP) — Asian shares were mostly lower Tuesday as investors wondered if a 90-day tariff truce was enough for the U.S. and China to resolve a range of issues from technology development to trade.

KEEPING SCORE: Japan's Nikkei 225 index shed 0.7 percent in early trading to 22,418.87 and the Kospi in South Korea lost 0.4 percent to 2,122.53. Hong Kong's Hang Seng dropped 0.2 percent to 27,139.87 while the Shanghai Composite index added 0.1 percent to 2,657.35. Both Chinese indexes finished more than 2 percent higher on Monday. The S&P ASX/200 in Australia gave up 0.7 percent to 5,729.40. Shares fell in Taiwan and Singapore but rose in Indonesia and the Philippines.

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WALL STREET: A cease-fire in a trade dispute between the world's two largest economies lifted major U.S. indexes on Monday. The S&P 500 index jumped 1.1 percent to 2,790.37, after gaining close to 5 percent last week. The Dow Jones Industrial Average was 1.1 percent higher at 25,826.43. The Nasdaq composite added 1.5 percent to 7,441.51. The Russell 2000 index of smaller-company stocks picked up 1 percent to 1,548.96.

U.S-CHINA TRUCE: On Saturday, a meeting between U.S. President Donald Trump and Chinese President Xi Jinping ended with a verbal agreement to hold off on further tariffs for at least 90 days. Trump was set to raise tariffs from 10 to 25 percent on $200 billion in Chinese goods, starting Jan. 1. In return, the White House said Xi will buy a "very substantial amount" of U.S. agricultural, energy and industrial products. On Monday, Treasury Secretary Steven Mnuchin told reporters that the leaders had detailed conversations on 142 items and will need to turn pointers into a "real agreement" in the coming months.

ANALYST'S TAKE: "Markets are reflecting a fragile truce between the U.S. and China after an initial sigh of relief. Investors are taking some money off the table as they figure out the details of what the leaders have agreed to and how long the truce can last," said Song Seng Wun, an economist at CIMB Private Banking.

ENERGY: Oil prices are rallying ahead of an OPEC meeting on Thursday, where members are expected to cut output in 2019. News that the Canadian province of Alberta will cut production by 325,000 barrels a day also boosted sentiment. Benchmark U.S. crude gained 51 cents to $53.46 per barrel in electronic trading on the New York Mercantile Exchange. It added $2.02 to settle at $52.95 a barrel on Monday. Brent crude rose 52 cents to $62.21 per barrel. It ticked up $2.23 to $61.69 a barrel in London.

CURRENCIES: The dollar weakened to 113.34 yen from 113.63 yen late Monday. The euro rose to $1.1367 from $1.1353.

Credits

By ANNABELLE LIANG

Copyright 2018 The Associated Press. All rights reserved.

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