World stocks mixed as US, China move toward deal

SINGAPORE (AP) — World stocks were mixed yesterday after the United States (US) and China said they were closing in on a trade deal, without giving a timeline for when negotiations would wrap up.

Britain’s FTSE 100 lost 0.1 per cent to 7,431.90 in early trading while the CAC 40 in France gained 0.1 per cent to 5,506.59. Germany’s DAX was flat at 12,000.12.

On Wall Street, the future contract for the broad S&P 500 index slipped less than 0.1 per cent to 2,911.80. That for the Dow Jones Industrial Average was 0.1 per cent higher at 26,433.00.

US stocks were supported last Friday by strong first-quarter profits from banks JPMorgan Chase and Wells Fargo. Traders are waiting to see if other big companies do equally well in the days ahead, as a judge of the strength of corporate America.

“Further encouraging readings during the remainder of the earnings season should feed into the broader risk sentiment narrative and help improve investor confidence, as long as the releases do not reveal any negative surprises,” Lukman Otunuga, a research analyst at ForexTime (FXTM), said in a commentary.

Last Saturday, US Treasury Secretary Steven Mnuchin told reporters that the US and China were moving closer to an agreement on trade.

People walk past an electronic board showing Hong Kong share index outside a local bank in Hong Kong yesterday. – AP

Speaking on the sidelines of the International Monetary Fund and World Bank spring meetings, Mnuchin said the US and China held phone discussions last week and he wasn’t sure if more face-to-face meetings would be needed. He did not give a timeframe for when negotiations might be wrapped up.

Mnuchin added that the proposed agreement has seven chapters and will allow both countries to set up enforcement offices to make sure the deal is followed.

Chinese Foreign Ministry spokesman Lu Kang said last Thursday that the discussions were “moving forward” and “new substantial progress” was made.

Markets made early gains in Asia on hopes that the wide-ranging dispute between the world’s two biggest economies could soon be put to rest. But the lack of a timeline was discouraging to some investors.

The Shanghai Composite index, which jumped almost two per cent in early trading, finished the day 0.3 per cent lower at 3,177.79.

Hong Kong’s Hang Seng gave up 0.3 per cent to 29,810.72. Australia’s S&P ASX 200 was flat at 6,251.40 while Japan’s Nikkei 225 index jumped 1.4 per cent to 22,169.11.

The Kospi in South Korea added 0.4 per cent to 2,242.88. Stocks rose in Taiwan but fell in Singapore and the Philippines.

ENERGY: Benchmark US crude shed 17 cents to USD63.72 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 31 cents to close at USD63.89 last Friday. Brent crude, used to price international oils, lost 13 cents to USD71.42 per barrel in London. It added 72 cents in the previous session to USD71.55.

CURRENCIES: The dollar weakened to 111.96 yen from 112.01 yen late Friday. The euro rose to USD1.1313 from USD1.1300.