Shanghai leads share retreat in Asia on trade talks doubts

|    Annabelle Liang    |

SINGAPORE (AP) – Shanghai led a retreat in world markets yesterday amid worries that the United States (US) and China may not be as close to a trade deal as US President Donald Trump has suggested.

Selling picked up after China reported that its exports plunged more than 20 per cent in February from a year earlier. The Shanghai Composite tumbled 4.4 per cent to 2,969.86, while Hong Kong’s Hang Seng sank 1.9 per cent to 28,228.42.

Asia’s gloom spread to Europe, where the CAC 40 in France lost 0.4 per cent to 5,246.65. Germany’s DAX fell 0.5 per cent to 11,455.14, while Britain’s FTSE 100 declined 0.8 per cent to 7,097.92.

Wall Street was set for losses at the open. Futures for the broad S&P 500 index dropped 0.3 per cent to 2,745.60. That for the Dow was also down 0.3 per cent at 25,428.00.

On Thursday, The New York Times reported that the US and China had reached a broad agreement on removing some tariffs in both countries. This involves China buying more American goods and opening some of its markets further to foreign companies, it said.

But the report said negotiators haven’t locked down key details, like when the tariffs will be removed and how to ensure China holds up its end of the deal. It added, citing two people familiar with Beijing’s position, that Chinese officials were wary about the final terms given Trump’s proclivity for last minute-changes.

Trump told reporters on Wednesday that negotiations were “moving along very nicely”. Last week, the US shelved a tariff hike on USD200 billion in Chinese goods to give officials time to work out a deal.

Losses yesterday were compounded by concerns about the global economy.

New customs data showed China’s exports fell 20.7 per cent in February from a year earlier, far more than the expected 4.8 decline. Imports also missed the mark, dropping 5.2 per cent. The report suggests the economy is slowing further.

Japan’s benchmark Nikkei 225 sank two per cent to 21,025.56, even after the government said its economy grew 1.9 per cent in 2018’s fourth quarter, from a year ago. This was better than the initial estimate of 1.4 per cent.

South Korea’s Kospi fell 1.3 per cent to 2,137.44 and Australia’s S&P/ASX 200 eased one per cent to 6,203.80. Stocks fell in Taiwan and throughout Southeast Asia.

ENERGY: US crude lost 86 cents to USD55.80 a barrel in electronic trading on the New York Mercantile Exchange. It picked up 44 cents to USD56.66 a barrel on Thursday. Brent crude, used to price international oils shed USD1.07 to USD65.23 a barrel in London. The contract rose 31 cents to settle at USD66.30 per barrel on Thursday.

CURRENCIES: The dollar weakened to 111.04 yen from 111.57 yen late Thursday. The euro advanced to USD1.1209 from USD1.1194.