Asian stocks mixed as US-China trade talks continue
Japan’s Nikkei 225 rose 0.82 percent to close at 20,204.04 while the Topix index gained 0.39 percent to finish its trading day at 1,518.43.
Shares of Japanese car-maker Nissan recovered from their earlier losses to gain 0.21 percent amid broadly positive momentum in the auto sector. The company’s former Chairman Carlos Ghosn denied wrongdoing in his first public appearance in seven weeks at a Tokyo court, following his arrest in November last year on allegations of financial misconduct.
Over in South Korea, the Kospi slipped 0.58 percent to close at 2,025.27. Shares of industry heavyweight Samsung Electronics slipped 1.68 percent after the company announced estimated fourth quarter earnings which fell far short of analyst expectations.
On the back of Samsung’s announcement, LG Electronics also saw its shares tumble 3.58 percent after it cautioned that its profits likely fell 80 percent in the fourth quarter.
Chipmaker SK Hynix, on the other hand, saw gains of 0.85 percent. The stock had earlier risen as high as 3 percent during the trading day.
The ASX 200 in Australia rose 0.69 percent to close at 5,722.4, with almost all sectors higher.
The heavily-weighted financial subindex advanced 0.77 percent as shares of the country’s so-called Big Four banks mostly saw gains; Australia and New Zealand Banking Group rose 1.1 percent, Westpac advanced 1.19 percent and National Australia Bank gained 0.91 percent. Commonwealth Bank of Australia, on the other hand, slipped 0.14 percent.
Asia-Pacific Market Indexes Chart
|NIKKEI||Nikkei 225 Index||NIKKEI||20204.04||165.07||0.82|
|HSI||Hang Seng Index||HSI||25875.45||39.75||0.15|
|ASX 200||S&P/ASX 200||ASX 200||5722.40||0.00||0.00|
|CNBC 100||CNBC 100 ASIA IDX||CNBC 100||7402.85||10.88||0.15|
The Shanghai composite declined by 0.26 percent to close at 2,526.46 while the Shenzhen composite slipped 0.117 percent to finish at about 1,299.89. The Shenzhen component also fell 0.116 percent to close at 7,391.65.
Over in Hong Kong, the Hang Seng index was largely flat during its final hour of trading. Hong Kong-listed shares of Chinese automaker Geely plummeted almost 11 percent after the company predicted flat sales for 2019.
Investors were on the lookout for developments on the second day of trade negotiations between the U.S. and China.
China said on Monday that it is willing to resolve its trade disputes with the U.S. on an equal footing, according to Lu Kang, spokesman at the Chinese foreign ministry.
One economist expressed caution over the talks.
“It still looks like we’re talking more about superficialities ... than some of the fundamental issues,” Simon Baptist, global chief economist at The Economist Intelligence Unit, told CNBC’s “Squawk Box” on Tuesday morning.
“What really matters is these issues over market access, that’s the thing the U.S. firms care about. Having a level playing field when they’re competing in China ... against the (state-owned enterprises) and others. And then also, the issues around intellectual property and technology transfer,” Baptist said.
“The EIU is still not optimistic about both sides coming to a substantive deal by 1st March,” said another EIU analyst, Nick Marro, said in a note. “China would need to significantly re-calibrate its industrial policies to fully meet the US trade team’s demands. The limited policy movement that we’ve seen so far suggests that a game-changing deal remains unlikely.”
Over in the U.S., Commerce Secretary Wilbur Ross told CNBC’s “Squawk Box” on Monday that U.S. tariffs have placed pressure on China’s economy and ability to create jobs to avert social unrest.
The U.S. and China slapped a series of punitive tariffs on each other’s goods last year, sparking concerns over a global economic slowdown.
The Japanese yen, widely viewed as a safe-haven currency, traded at 109.03 after seeing highs around the 108 handle yesterday. The Australian dollar was at $0.7124 after touching an earlier high of $0.7149.
— Reuters contributed to this report.
European stocks close higher amid US-China trade talks; Carrefour rises 2.7%
European Markets: FTSE, GDAXI, FCHI, IBEX
Investors were mostly monitoring the second day of trade talks between China and the United States. In the U.S. Tuesday, stocks surged to three-week highs after President Donald Trump tweeted that talks with China were going “very well,” with the dollar also rallying after a shaky start to the year. Dow Jones reported on Tuesday afternoon that negotiators from China and the U.S. had narrowed some of their differences.
Looking across the European index, WM Morrison fell 3 percent to near the bottom of the list. The retailer missed its Christmas sales forecasts. On the other hand, Carrefour rose almost 3 percent after Bank of America upgraded the stock.
Chemicals firm Sika dropped 4 percent following news that it will buy its French rival Parex for $2.55 billion, according to Reuters. In other corporate news, Nissan’s ousted Chairman Carlos Ghosn appeared before a court on Tuesday to argue against allegations of financial misconduct.
Fears grew for Germany’s economy on Tuesday, as another set of dismal industrial data fueled concern that Europe’s largest economy is heading for a recession. Elsewhere, the euro zone business climate index dropped to 0.82 in December from 1.04 in the previous month, showing new signs of economic weakness in the region.
Dow climbs more than 200 points to notch its first 3-day winning streak since November
Apple shares rose 2.3 percent after CEO Tim Cook tried to assuage some of the concerns plaguing the tech giant. In an interview with CNBC’s Jim Cramer, Cook said Apple’s “ecosystem has never been stronger. ” Apple took a beating last week after slashing its quarterly revenue forecast, citing a slowdown in China. Cook also said he feels good about the “real-time ” information he receives regarding the U.S.-China trade talks.
Amazon also gained 1.8 percent, while Facebook jumped 2.9 percent. Netflix and Alphabet also traded higher. These gains add to the so-called FAANG trade’s sharp rise since late December. Through Monday’s close, Facebook shares have surged 12.2 percent since then, while Amazon has rocketed 24.7 percent. Alphabet shares, meanwhile, are up 35 percent in that time period.
“People are getting a bit more optimistic. I think investors noticed that the FAANG stocks are solid companies and their valuations came down a lot after the big sell-off,” said Ryan Nauman, market strategist at Informa Financial Intelligence. There’s also “some optimism in trade and the FAANGs have been pretty highly correlated to the developments of trade.”
Brendan McDermid | Reuters
China’s Foreign Ministry previously said Beijing had “good faith” to work with Washington to reach an agreement before a March deadline.
President Donald Trump also tweeted on Tuesday that U.S.-China trade talks are “going very well.”
Strategists at MRB Partners said in a note the U.S.-China trade situation is setting itself up for a more benign outcome than had been previously expected.
“The U.S.-China power struggle will persist for years, but both economies are now slowing and neither government has the latitude to pursue policies that could threaten to trigger a global recession,” they said. “The Argentina handshake will morph into a near-term truce.”
However, investors are still grappling with an ongoing U.S. federal government shutdown that started over a disagreement on funding for a wall along the U.S.-Mexico border. Trump is scheduled to deliver a prime-time address Tuesday night and is expected to focus on the standoff over his proposed border wall that has shut down large chunks of the federal government.
Bank shares struggled, however. J.P. Morgan Chase fell 0.6 percent, while Wells Fargo and Bank of America both dropped at least 0.6 percent. The losses came after Jefferies downgraded J.P. Morgan, citing the possibility of no rate hikes from the Federal Reserve.
Chipmakers also fell. Nvidia and Applied Materials both fell more than 2 percent. Lam Research and Advanced Micro Devices also slipped. The decline in chip stocks came after Samsung slashed its fourth-quarter earnings guidance due to lackluster demand for memory chips.
“Apple and Samsung warnings are important as they signal tighter margins, less pricing power and increased competition,” said Larry Benedict, founder of The Opportunistic Trader. “This affects more than these giants.”
“We are not optimistic here,” Benedict added.
—CNBC’s Sam Meredith contributed to this report.