Asian markets sluggish before crunch trade talks


HONG KONG, Feb 11, 2019 (BSS/AFP) – Trade uncertainty weighed on Asian
stocks Monday, at the start of a week that sees crunch China-US talks take
place in Beijing aimed at averting fresh tariff escalations.

Mainland Chinese markets reopened from their week-long Lunar New Year
break to renewed concerns over the trade row and a series of bearish global
growth forecasts.

Top US economic officials travel to the Chinese capital this week for the
third round of talks on Thursday and Friday, where preparatory talks among
deputies were due to start Monday.

Failure to agree a deal between the two economic superpowers before March
1 would see punitive US duties on $200 billion in Chinese goods more than

“There’s a sense of urgency to this round,” said Jeffrey Halley, senior
market analyst at OANDA.

He added: “If no deal is agreed by then, a belligerent President Trump and
US Congress will be more than willing to simply extend the trade war so China
will need to make the first move if they are to reach a detente.”
Analysts say the imposition of the tariffs could weaken the global

US President Donald Trump said last week he does not expect to meet his
Chinese counterpart Xi Jinping before the deadline, while White House
economist Larry Kudlow said Washington and Beijing were a “sizeable distance”
apart in talks.

Hong Kong traded flat, while Seoul dropped 0.1 percent and Sydney was down
0.4 percent.

But Shanghai edged up 0.2 percent after its week-long break.

Tokyo was closed for a holiday.

Meanwhile, the International Monetary Fund warned governments to prepare
for a possible economic “storm” as growth forecasts dip.

It cited the trade row as one of four “clouds” overshadowing the global
economy, along with Brexit uncertainty, the accelerated slowdown in China and
financial tightening.

“The bottom-line — we see an economy that is growing more slowly than we
had anticipated,” IMF managing director Christine Lagarde told the World
Government Summit in Dubai at the weekend.

The EU, Britain and Australia all slashed growth forecasts late last week.

Adding to market trepidation is the spectre of a repeat of the 35-day
partial US government shutdown that ended January 25 — the longest in the
country’s history.

Key Republican negotiator Richard Shelby blamed Democrats for another
impasse over immigration at the weekend, in talks that have been defined by
Trump’s demand for funds for a border wall.

Oil prices continued to tumble with growing oversupply fears linked to
record US shale output, with both main contracts posting losses.

– Key figures around 0240 GMT –

Hong Kong – Hang Seng: FLAT at 27,954.45

Shanghai – Composite: UP 0.2 percent at 2,622.76

Tokyo – Nikkei 225: Closed for a public holiday

Euro/dollar: FLAT at $1.1325 from $1.1325 at 2200 GMT Friday

Dollar/yen: UP at 109.89 yen from 109.72 yen

Pound/dollar: FLAT at $1.2937 from $1.2937

Oil – West Texas Intermediate: DOWN 64 cents at $52.08 per barrel

Oil – Brent Crude: DOWN 58 cents at $61.52 per barrel

New York – Dow: DOWN 0.3 percent at 25,106.33 (close)

London – FTSE 100: DOWN 0.3 percent at 7,071.18 (close)