Asian markets down as attention turns back to trade talks

HONG KONG (AFP) – Asian markets mostly fell yesterday as trade issues returned to the spotlight with China and the US holding more high-level talks this week, while oil prices held gains as tensions in the Middle East simmer.

A run-up in equities over the past week has also led to profit-taking, with Hong Kong hit after six straight days of gains.

US markets rose again as Chinese Vice Premier Liu He – President Xi Jinping’s right-hand man on economic issues – headed to Washington yesterday for a new round of talks aimed at heading off a trade war between the economic giants.

There are hopes the two sides can hammer out an agreement to end a dispute that has seen both sides threaten tariffs on billions of dollars of goods.

Donald Trump’s call to help get Chinese telecom equipment maker ZTE “back into business fast” soothed nerves, while Commerce Secretary Wilbur Ross said on Monday he was exploring “alternative remedies” for the firm, which was in April banned from buying crucial US technology for seven years.

A man walks past an electronic stock board showing Japan’s Nikkei 225 index and other country’s index at a securities firm in Tokyo. – AP

“China is reportedly close to removing tariffs on agricultural products in exchange for relief for ZTE,” said Stephen Innes, head of Asia-Pacific trade at OANDA. “It helps explain why President Trump said he’d work with President Xi on this company.”

The talks come as US officials try to reach agreements with Canada and Mexico on revising their three-way trade pact, while EU steel tariff exemptions are due to end on June 1.

Hong Kong closed 1.2 per cent lower after racking up gains of more than five per cent over the previous six sessions, while Tokyo ended 0.2 per cent down.

Sydney shed 0.6 per cent, Singapore fell 0.4 per cent and Seoul sank 0.7 per cent, with Wellington, Bangkok and Jakarta also lower.

However, there were gains in Manila and Kuala Lumpur.