By Marketwatch and Associated Press
Asian stocks sank Friday as investors waited for a meeting between Presidents Donald Trump and Xi Jinping that they hope will produce a truce in spiraling U.S.-China trade tensions.
Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney all fell. Crude prices declined.
Investors are hoping for a repeat of President Donald Trump and Xi’s December agreement to postpone new tariff hikes and other action while they negotiated over trade and technology. But analysts caution any new truce at the G-20 meeting of major economies in Japan is likely to be temporary because negotiators face the same disagreements that caused talks to break down in May.
Trump met with the leaders of Japan, Germany and India on the sidelines of the meeting in Osaka, Japan, and said he was optimistic about making trade deals with all three of those countries. Trump was scheduled to meet with Russia’s Vladimir Putin later in the day, and with China’s Xi Jinping on Saturday, and hopes are high that the meeting with Xi will produce a cease-fire in the trade war.
“We have watched this movie before: China and the U.S. talk, leaks from policymakers on both sides encourage speculation we are close to a deal, things fall apart,” said Hannah Anderson of J.P. Morgan Asset Management in a report.
The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.38% dropped 0.9%, Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.70% slipped 0.5% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.13% fell 0.6%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.67% declined 0.4%, and benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +0.31% slipped 0.3%, Singapore /zigman2/quotes/210597985/delayed SG:STI +0.11% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX -0.09% were mixed. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.29% fell 0.5%.
Among individual stocks, beer maker Sapporo Holdings /zigman2/quotes/200413497/delayed JP:2501 -1.04% gained in Tokyo trading, while Japan Steel /zigman2/quotes/207991538/delayed JP:5631 +1.93% and Chiba Bank /zigman2/quotes/204270057/delayed JP:8331 -2.11% fell. In Hong Kong, food processor WH Group /zigman2/quotes/204247792/delayed HK:288 +1.11% sank, as did oil producer CNOOC /zigman2/quotes/203421416/delayed HK:883 -2.72% and casino operator Sands China /zigman2/quotes/207609245/delayed HK:1928 +5.20% . Chip maker SK Hynix /zigman2/quotes/206420319/delayed KR:000660 -0.60% fell in South Korea, and BHP /zigman2/quotes/201448516/delayed AU:BHP +1.02% and Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO +0.97% dropped in Australia.
On Wall Street, S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.10% rose 0.4% to 2,924.92. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.09% slipped less than 0.1% to 26,526.58 and the Nasdaq composite /zigman2/quotes/210598365/realtime COMP -0.56% gained 0.7% to 7,967.76.
This weekend marks the first face-to-face meeting between Trump and Xi since the American president said he was preparing to target the $300 billion in Chinese imports that he hasn’t already hit with tariffs, extending them to everything China ships to the United States.
The two sides are in a stalemate after 11 rounds of talks that failed to overcome U.S. concerns over China’s acquisition of American technology and its massive trade surplus. China denies forcing U.S. companies to hand over trade secrets and says the surplus is much smaller than it appears once the trade in services and the value extracted by U.S. companies are taken into account.
Despite worries over trade, investors have mostly pushed stocks higher this month as the Federal Reserve raised expectations that it is prepared to cut interest rates if needed to shield the economy should the damage from the costly trade conflict worsen.
Benchmark U.S. crude fell 37 cents to $59.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 5 cents on Thursday to close at $59.43. Brent crude , used to price international oils, shed 39 cents to $65.28. The contract lost 2 cents the previous session to $65.67.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.2257% declined to 107.59 yen from Thursday’s 107.79 yen.