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Nov. 11, 2019, 11:49 p.m. EST

Asian markets little changed as traders seek direction

Hang Seng stable after big loss Monday; Nikkei inches up

By Marketwatch and Associated Press


AFP/Getty Images
A protester wears a Guy Fawkes mask as commuters wait in a bus in the Wan Chai district of Hong Kong on Monday.

Asian markets sought direction in early trading Tuesday, as traders awaited the next development in U.S.-China trade talks and violent protests continued in Hong Kong.

President Donald Trump said over the weekend that while trade talks were going “very nicely,” there was not yet an agreement to roll back tariffs. On Monday, Politico reported that Trump was likely this week to extend the deadline on whether to impose tariffs up to 25% against European auto imports.

Hong Kong’s leader on Monday suggested police would take harsher measures to control protests, after a particularly violent day Monday, in which police shot one demonstrators and another man was set on fire. Protests continued Tuesday, with pro-democracy demonstrators blocking streets and subway entrances for the morning commute.

“Investors could remain skittish ahead of President Trump’s appearance at the New York Economic Club on Tuesday,” wrote Stephen Innes, chief Asia market strategist at AxiTrade, in a note Monday. “This speech could be the main event this week, especially if the president dangles any tangible details about his upcoming meeting with President Xi of China.”

Japan’s Nikkei (NIKKEI:JP:NIK)   edged up 0.2% while Hong Kong’s Hang Seng Index (HONG:HK:HSI)  , which tumbled 2.5% on Monday, was about flat. The Shanghai Composite (SHG:CN:SHCOMP)   fell 0.4% while the Shenzhen Composite (SHENHZEN:CN:399106)   retreated 0.7%. South Korea’s Kospi (KOREA:KR:180721)   inched up 0.2%, while benchmark indexes in Taiwan (TAIWAN:TW:Y9999)  , Singapore (SES:SG:STI)  , Malaysia (KLS:MY:FBMKLCI)   and Indonesia (INDONESIA:ID:JAKIDX)   were mixed. Australia’s S&P/ASX 200 (S&P:AU:XJO)   fell 0.4%.

Among individual stocks, convenience-store chain FamilyMart (TKS:JP:8028)   gained in Tokyo trading, while SoftBank (TKS:JP:9984)   and Japan Steel Works (TKS:JP:5631)   fell. In Hong Kong, Country Garden (HKG:HK:2007)   and Tencent (HKG:HK:700)   rose, while Wharf Real Estate (HKG:HK:1997)   and Sunny Optical (HKG:HK:2382)   declined. Samsung (KRX:KR:005930)   advanced in South Korea and Taiwan Semiconductor (TAI:TW:2330)   rose in Taiwan. Qantas (ASX:AU:QAN)   and Virgin Australia (ASX:AU:VAH)   gained in Australia.

On the Chinese mainland, an industry group reported late Monday that China’s auto sales fell 5.8% from a year earlier in October as demand for electric cars plunged, an industry group reported Monday, extending a painful squeeze in the global industry’s biggest market.

The Chinese auto market is on track to contract for second year, dragged down by weak demand in the face of cooling economic growth and a tariff war with Washington.

Data on bank lending also disappointed, with new lending in October logging the lowest level since December 2017, at 661.3 billion yuan ($94.4 billion).

On Wall Street, stocks dropped as soon as trading began Monday, and the S&P 500 lost as much as 0.6% from its record level, though indexes pared their losses as the day progressed.

The S&P 500 (S&P:SPX)   lost 0.2% to 3,087.01 and the Nasdaq composite (AMERICAN:COMP)   slipped 0.1%, to 8,464.28. The Dow Jones Industrial Average (DOW:DJIA)   was an outlier and eked out another record, rising less than 0.1% to 27,691.49.

A major factor in the advance was Boeing (NYS:BA)  , whose shares soared 4.5% after the aircraft maker said it hopes to resume deliveries of its 737 Max jet next month.

Bond markets were closed in observance of Veterans Day.

Low interest rates have helped drive the stock market’s recent rally. On Wednesday, Fed Chairman Jerome Powell is due to give testimony to Congress about the economy. Most investors expect the Fed to keep interest rates on hold for now after cutting them three times since the summer.

Later this week, the Labor Department will also give updates on inflation at both the consumer and wholesale levels. On Friday, economists expect a government report to show that retail sales returned to growth in October. That would suggest robust consumer spending is helping to compensate for weaker manufacturing due to the trade war.

Earnings season is close to complete, and nearly 90% of the companies in the S&P 500 have reported their profits for the July-through-September quarter, according to FactSet. Results have been weak due in part to the slowing global economy, with earnings per share down 2.4% from a year earlier, not as bad as analysts had forecast.

Benchmark crude oil   fell 6 cents to $56.80 per barrel in electronic trading on the New York Mercantile Exchange. It lost 38 cents to settle at $56.86 a barrel on Monday. Brent crude oil  , the international standard, lost 2 cents to $62.16. It fell 33 cents to $62.18 a barrel in London.

The dollar (XTUP:USDJPY)   rose to 109.13 Japanese yen from 109.06 yen on Monday.

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