By Associated Press and Marketwatch
Asian markets had a struggle on Wednesday, as Japan reported weak export data and news surfaced of possible hiccups in China-U.S. trade talks.
Japan’s Nikkei 225 index /zigman2/quotes/210597971/delayed JP:NIK -0.78% ended down 0.1% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.24% rose around 0.5%. Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +0.71% and the Shanghai Composite index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.74% finished flat. Australia’s S&P ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.54% fell 0.2%, while shares also fell in Taiwan , Singapore /zigman2/quotes/210597985/delayed SG:STI +0.53% and Malaysia /zigman2/quotes/210598052/delayed MY:FBMKLCI +0.72% .
U.S. investors returned from a holiday Tuesday to lower global growth forecasts by the International Monetary Fund and news that China’s economy expanded last year at its slowest pace since 1990. Reports that the Trump administration recently rejected a meeting with Chinese trade officials caused major indexes to slip further. The S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.08% declined 1.4% to 2,632.90. The Dow Jones industrial average /zigman2/quotes/210598065/realtime DJIA -1.51% dropped 1.2% to 24,404.48 and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.86% was down 1.9% at 7,020.36.
Among individual stocks, Apple supplier Japan Display /zigman2/quotes/204799605/delayed JP:6740 0.00% surged after a Wall Street Journal report that it is seeking a bailout from an investor group due to disappointing sales of the iPhone XR. Subaru shares /zigman2/quotes/203522406/delayed JP:7270 -1.55% tumbled after the Japanese auto maker halted auto production over a defective part . In Hong Kong, Apple suppliers AAC /zigman2/quotes/201441510/delayed HK:2018 +4.49% and Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 +2.86% fell, as did oil producer CNOOC /zigman2/quotes/203421416/delayed HK:883 -1.01% . Oil companies fell in Australia too, with Woodside Petroleum /zigman2/quotes/203437212/delayed AU:WPL -1.69% and Oil Search /zigman2/quotes/204702973/delayed AU:OSH -3.17% down.
On Wednesday, Japan released weaker-than-expected trade data for December. The country said its exports fell by 3.8% from a year earlier, its largest drop in two years. It also posted its first full-year trade deficit since 2015. Imports climbed 1.9% in December, missing the market estimate of a 3.7% rise, and way below November’s 12.5% surge. Weaker Japanese exports suggest that a slowdown in China, the world’s second largest economy, is starting to have an impact on companies elsewhere that rely on it for business.
Media outlets including the Financial Times and CNBC have reported that the White House turned down an offer by Chinese trade officials to meet in Washington this week, because of the lack of progress on matters like intellectual property theft. According to the reports, which cited unnamed sources close to the matter, the preparatory talks were meant to soften the ground before China’s economy czar, Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer meet on Jan. 30 and 31. White House economic adviser Larry Kudlow denied that, saying both sides are working toward the higher level talks. Separately, Kudlow told Reuters that President Donald Trump is “not going to back down” on forcing China to make substantive reforms concerning trade.
“The U.S. strategy might be to raise pressure on the Chinese ahead of the hard deadline in March, but this makes for uncomfortable interpretation by markets, and could potentially induce excessive volatility in the interim,” Chang Wei Liang of Mizuho Bank said in a commentary.
U.S. crude picked up 0.4% to $5323 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed $1.03 lower at $53.01 per barrel on Tuesday. Brent crude , used to price international oils, gained 0.6% to $61.89 per barrel. It dropped $1.24 to $61.50 per barrel in London.