Thursday, May 28, 2020 | ePaper

Asia shares mostly higher China-US trade deal fades

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UNB, Bangkok :
Shares were mostly higher in Asia on Tuesday after a wobbly day of trading on Wall Street.
Japan's Nikkei 225 index jumped 1.9% to 22,207.21 as Tokyo reopened from a public holiday and investors caught up on the news of a preliminary trade deal between China and the U.S. struck Friday in Washington.
But optimism over the agreement appeared to be fading and markets in Hong Kong and Shanghai fell back.
The Shanghai Composite index lost 0.6% to 2,991.05 while the Hang Seng in Hong Kong edged 0.1% lower to 26,498.32. South Korea's Kospi gained less than 0.1% to 2,068.17 and the S&P ASX 200 added 0.1% to 6,652.00.
Shares rose in Taiwan and most of Southeast Asia but fell in Singapore.
Wall Street ended a choppy day of trading on Monday with modest losses. Losses for consumer goods makers, utilities and technology stocks helped outweigh gains in banks and real estate companies. A 2% drop in crude oil prices also hurt energy stocks.
Stocks had rallied Friday as investors welcomed the signs of progress in the latest round of trade negotiations between the U.S. and China, but some of that enthusiasm already had faded by Monday morning.
Washington and Beijing agreed to a truce Friday, with the U.S. agreeing to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
"That said, the abovementioned items are no doubt the lower hanging fruits in attempting a deal between the two sides. Few are likely ruling out the possibility that there could be more twists and turns in this matter of U.S.-China trade conflict," Jingyi Pan of IG said in a commentary.
The U.S. did not, however, cancel plans for more tariffs in December and the sticking points of intellectual property and trade secrets still hang over the dispute. And the overall picture hasn't changed for companies, which are still holding off on forecasts and investments because of the uncertain trade situation.
"We kind of peeled back the layers and said, 'Hey, was this really a significant trade deal, or was it just a little bit of window dressing to make everybody feel like there was actually a trade deal?'" said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. "The market is digesting that."
The S&P 500 index slipped 0.1% to 2,966.15. The Dow Jones Industrial Average dropped 0.1%, to 26,787.36. The Nasdaq gave up 0.1% to 8,048.65.
Small-company stocks did worse than the rest of the market. The Russell 2000 index lost 0.4% to 1,505.43.
Bond markets and the U.S. government were closed for the Columbus Day holiday.
The modest pullback followed last week's market rally, when the S&P 500 and the Dow had their first gains in four weeks.
Benchmark crude oil fell 44 cents to $53.15 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.11 to settle at $53.59 a barrel on Monday. Brent crude oil, the international standard, lost 38 cents to $58.97 per barrel. It dropped $1.16 to close at $59.35 a barrel in London.
The dollar fell to 108.37 Japanese yen from 108.40 yen on Monday. The euro fell to $1.1023 from $1.1027.

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