SHANGHAI (Reuters) – Asian stocks fell on Friday as the deteriorating global economic outlook offsets new signs of progress in trade talks between China and the United States.
Market prices are shown in a showcase on the Tokyo Stock Exchange (TSE) in Tokyo, Japan on February 6, 2018. REUTERS / Toru Hanai / File Photo
After increasing slightly at the start of trading, the broader Asia-Pacific MSCI equity index out of Japan fell into the red as more markets opened up in the region, dipping 0.1 %.
Chinese blue-chip stocks fell 0.1% in late-morning trading after a brief breakthrough in positive territory.
After expressing optimism on Monday over trade talks, China's leading stock indexes have fallen head over heels in the face of investor concern over slowing domestic growth and the possibility that Chinese authorities will resort to a Reference loan as a last resort to revive the economy.
New home price growth in China fell to its lowest level in nine months in January as general economic weakness weighed more and more heavily on the real estate sector.
Kospi Seoul lost 0.3%. Shares in Taiwan were also down 0.3%.
Japan's Nikkei fell 0.4% after data showed that core consumer inflation accelerated slightly in January, but remained far from the central bank's target of 2%, highlighting fragility of the economic recovery in the country.
Australian stocks gained 0.4%.
Rob Carnell, chief economist and head of research for the Asia-Pacific region at ING, said the combination of trade talks and the Federal Reserve's cautiousness in the face of further rate hikes had helped support more assets. risky, including stocks.
But with a more dovish Fed and a kind of already integrated trade agreement, new developments in the trade "did not really have an impact similar to the one they would have had on the markets a week, weeks or months ago, "he said. I said.
Nevertheless, investors continue to monitor the high-level negotiations between US and Chinese negotiators in Washington just over a week before the expiration of the US deadline for an agreement, which would lead to a increase in customs duties.
Reuters reported on Wednesday that the two sides are drafting the text of six memoranda of understanding on China's proposed reforms, which have helped improve investor sentiment.
Chinese Vice Premier Liu He will meet with President Donald Trump on Friday, the White House announced.
In the midst of trade talks, new data from the United States showed Thursday that its economic outlook is also changing.
The US Commerce Department said Thursday that domestic non-defense capital goods orders, excluding aircraft, represented a closely guarded surrogate for corporate spending plans, had dropped 0.7% .
In addition, the factories sector in the United States in the mid-coastal US entered February contraction for the first time since May 2016, according to data from the Federal Reserve of Philadelphia.
"While the global manufacturing sector is weak, the services business seems more positive. But it's hard to see that industries and services diverge long, "ANZ analysts said in a morning note.
"The manufacturing industry has strong multiplier effects that imply a risk of loss for the service sector, especially in Europe. And the commercial uncertainty that weighs on the manufacturing sector must be resolved. "
The yield on 10-year Treasury bonds edged down to 2.6842 percent on Friday, from 2.688 percent in the United States on Thursday, due to investor optimism about the progress of trade negotiations.
The two-year return, seen as an indicator of expectations of higher federal funds rates, declined to 2.5224% after a US closing of 2.529%.
The Australian dollar rebounded after falling more than 1% on Thursday on a Reuters report that the port of Dalian, in northern China, had permanently banned imports of Australian coal.
On Friday, the Governor of the Reserve Bank of Australia, Philip Lowe, warned not to consider the restrictions as targeting Australia, and Prime Minister Scott Morrison said the ban did not bode well. a deterioration of the links between the countries.
Separate comments from Lowe that a rate hike may be appropriate next year also contributed to the rise in the Australian dollar.
It was up 0.06 percent to $ 0.7092.
The US dollar rose slightly against the yen to settle at 110.73, while the euro rose slightly to buy 1.337 dollar.
The dollar index, which follows the greenback against a basket of six major rivals, remained steady at 96.602.
US crude plunged 0.2% to 56.85 dollars a barrel. Brent also lost 0.2% to $ 66.92.
Gold rebounded after falling more than 1% on Thursday, with a spot gold trading of about 0.2% to $ 1,326.30 an ounce.
Reportage by Andrew Galbraith; Additional report by Richard Leong in NEW YORK; Edited by Richard Borsuk & Kim Coghill