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Asia Shares Mixed; Mnuchin Says US-China Trade Talks in ‘Final Laps’

By:
James Hyerczyk
Published: Apr 29, 2019, 06:05 UTC

Investors in Asia showed little reaction to the better-than-expected U.S. economic data and the mixed batch of corporate earnings reported on Friday. First-quarter gross domestic product was 3.2% according to the Commerce Department, beating the consensus estimate of 2.5%.

Asian Markets

The major Asia Pacific stock indexes bucked Friday’s trend on Wall Street to trade mixed on Monday with traders paying more attention to domestic issues than global events. Of particular interest for investors was another weak performance in mainland Chinese shares. There was no action in Japan with the country on holiday for an extended period of time.

At 05:36 GMT, China’s Shanghai Index was trading 3089.56, up 3.16 or +0.10 percent. Hong Kong’s Hang Seng Index is at 29816.22, up 211.21 or +0.71 percent. South Korea’s KOSPI is trading 2206.81, up 27.50 or 1.26 percent. Profit-taking hit Australia’s S&P/ASX 200, driving it to 6357.30, down 28.30 or -0.44 percent.

U.S. equity futures markets were edging higher early Monday after the cash market S&P 500 and NASDAQ Indexes closed at record highs on Friday.

Investors in Asia showed little reaction to the better-than-expected U.S. economic data and the mixed batch of corporate earnings reported on Friday. First-quarter gross domestic product was 3.2% according to the Commerce Department, beating the consensus estimate of 2.5%.

Weakness in China

Last week’s weak price action put the mainland Chinese markets on the radar since they diverged from the U.S. markets. They posted their worst weekly performance since October, with the Shanghai Composite leading the way with a 5.5% drop.

Traders said that the selling pressure was fueled by comments made by China’s top decision-making body about the country’s economic stimulus plans.

On Friday, the Communist Party’s top decision-making body said China will maintain policy support for the economy, which still face “downward pressure” and difficulties after better-than-expected first quarter growth.

Chinese investors are afraid of a policy shift that will reduce stimulus for the economy. According to reports, China will implement counter-cyclical adjustments “in a timely and appropriate manner,” while the pro-active fiscal policy will become more forceful and effective, and the prudent monetary policy will be neither too tight nor too loose, it said.

U.S.-China Talks:  Optimism Continues

Trade talks between the U.S. and China are now in the final stages, said U.S. Treasury Secretary Steven Mnuchin ahead of this week’s meeting in Beijing between negotiators from both sides, according to a New York Times report.

“We’re getting into the final laps,” the report quoted Mnuchin as saying, in an interview at the Milken Institute Global Conference in Los Angeles.

“I think both sides have a desire to reach an agreement,” Mnuchin said, according to the New York Times report. “We’ve made a lot of progress.”

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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