Asia stocks mostly higher after Trump trade threat
BEIJING – Asian stock markets rebounded Tuesday after Beijing said trade negotiators were preparing to go to Washington despite President Donald Trump’s threat to escalate their tariff war.
Benchmarks in Shanghai, Hong Kong and Sydney rose, while Tokyo declined after reopening following a long holiday.
The Shanghai Composite Index gained 0.9% to 2,932.49 and Hong Kong’s Hang Seng added 0.9% to 29,467.87.
Sydney’s S&P-ASX 200 was 0.8% higher at 6,337.90 while markets in New Zealand, Taiwan and Southeast Asia also advanced.
Tokyo’s Nikkei 225 lost 1.4% to 21,955.90 and Seoul’s Kospi slid 1.1% to 2,171.33.
Trump’s surprise threat Sunday of more tariff hikes triggered fears China might pull out of talks aimed at ending the fight over its technology ambitions.
Markets recovered after Beijing said envoys were preparing to go to Washington. U.S. Trade Representative Robert Lighthizer said talks would start Thursday.
There was no word on whether China’s top negotiator, Vice Premier Liu He, would go as scheduled.
“The base case still remains we see a framework agreement reached, but the market is still repricing in the risk,” Edward Moya of Oanda said in a report.
Trump’s threat Sunday reignited jitters that had been largely put to rest by statements from both sides that negotiations were making progress.
The American president accused Beijing of backtracking on commitments made in the rapid-fire negotiations.
Trump threatened to raise tariffs on $200 billion of Chinese goods to 25% from 10%, effective Friday.
He said he would impose increases on an additional $325 billion of imports, covering everything China sells to the United States.
“Beijing is not a big fan of hostage situations,” Vishnu Varathan of Mizuho Bank said in a report. “The tight deadline alongside threats of widening the tariff net may not play out favorably for prospects of an imminent deal.”
On Wall Street, companies with interests in China bore the brunt of Monday’s selling, particularly technology and industrial companies. Banks also fell sharply. Health care stocks rose.
The Standard & Poor’s 500 index dropped 0.5% to 2,932.47. The Dow Jones Industrial Average fell 0.3% to 26,438.48.
The Nasdaq slid 0.5% to 8,123.29.
Qualcomm, which gets 64.7% of its revenue from China, according to the data provider FactSet, fell 1.2%. Broadcom slid 1.3% and Apple dropped 1.5%.
Wynn Resorts, with casinos and hotels in Macau, gets about 75% of its revenue from China. Its stock tumbled 4.1%. /gsg
