Asian markets were mixed in early trading Tuesday, as a fresh round of U.S.-China trade talks were set to kick off in Beijing.
Treasury Secretary Steven Mnuchin, who will lead the U.S. delegation along with Trade Representative Robert Lighthizer, said Monday that negotiators should know this week or next whether a final trade deal will be made — or not. “We hope within the next two rounds of (talks) in China and in D.C. to be at the point where we can either recommend to the president we have a deal or make a recommendation we don’t,” Mnuchin told Fox Business Network. “There is a strong desire for both sides to see if we can wrap this up or move on.”
Stocks in mainland China rose, with the Shanghai Composite SHCOMP, +0.43% up 0.7% and the smaller-cap Shenzhen Composite 399106, +0.83% 1% higher despite data showing Chinese factory activity slowed in April, below expectations, but still in expansion mode.
“Softer than expected, manufacturing PMI out of China sets the region up for decline,” said Jingyi Pan of IG in a report.
That suggests some of March’s improvement was due to the rebound from the Lunar New Year holiday, when factories close for up to two weeks, said William Adams of PNC Financial Services Group. But he noted it was the second-strongest reading since October.
“The worst of China’s slowdown in late 2018 and early 2019 is over,” said Adams in a report.
Hong Kong’s Hang Seng index HSI, -0.48% slid 0.6%. South Korea’s Kospi SEU, -0.57% fell 1%, while benchmark indexes in Taiwan Y9999, +0.00% , Singapore STI, -0.37% and Indonesia JAKIDX, +0.44% were mixed. Australia’s S&P/ASX 200 XJO, -0.49% retreated 0.5%. Japan’s Nikkei was closed amid a 10-day national holiday to celebrate the ascension of Crown Prince Naruhito, who will become emperor May 1.
Among individual stocks, food processor WH Group 0288, +7.37% was one of the few gainers in Hong Kong, while casino operator Galaxy Entertainment 0027, -2.56% and oil producer CNOOC 0883, -2.45% fell. Samsung 005930, -0.22% slipped in South Korea after posting a 57% decline in quarterly profit. Chip maker HK Hynix 000660, -1.25% also declined. Apple manufacturer Foxconn 2354, -0.72% retreated in Taiwan, ahead of Apple’s AAPL, +0.15% quarterly earnings later Tuesday. BHP BHP, -1.23% and Beach Energy BPT, -1.61% dropped in Australia.
On Wall Street, the S&P 500 SPX, +0.11% edged up 0.1% on Monday to 2,943.03. Big gains for banks led the way on hopes for bigger profits from making loans, but losses for high dividend stocks held indexes in check. The Dow Jones Industrial Average DJIA, +0.04% rose less than 0.1% to 26,554.39. The Nasdaq composite COMP, +0.19% gained 0.2% to 8,161.85. Both the S&P 500 and Nasdaq closed at record highs.
A Commerce Department report showed the economy is growing but not too fast.
Consumer spending jumped 0.9% in March, the biggest gain in nearly a decade. But the same report also showed that the Federal Reserve’s preferred measure of price changes remains well below its target.
Low inflation gives the central bank more leeway to hold off on raising interest rates. It was the Fed’s pledge earlier this year to be patient on rates that sent stocks surging. The Federal Reserve will meet again on interest rates this week, and most investors expect it to make no changes.
Benchmark U.S. crude CLM9, -0.11% lost 5 cents to $63.45 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 20 cents on Monday to close at $63.50 per barrel. Brent crude LCON9, -0.29% , used to price international oils, fell 16 cents to $71.38 per barrel in London. The contract rose 11 cents the previous session to $71.54.
The dollar USDJPY, -0.11% edged down to 111.58 yen from Monday’s 111.65 yen.
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