Asian stock markets were mixed in early trading Tuesday, as investors kept an eye on the second day of trade negotiations between the U.S. and China.
While the mid-level talks, held in Beijing, were not expected to produce a deal, there was hope that they would lead to higher-level negotiations that could tamper down trade tensions and end the tit-for-tat tariff war. “I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues,” U.S. Commerce Secretary Wilbur Ross said in an interview Monday, Reuters reported.
Japan’s Nikkei NIK, +0.82% was up 1%, as SoftBank Group 9984, +5.68% jumped 5% after a Wall Street Journal report that it would scrap a $16 billion investment in U.S. startup WeWork, in favor of a smaller $2 billion investment. Nissan shares 7201, +0.21% were up slightly after former Chairman Carlos Ghosn declared his innocence in a Tokyo court in his first public appearance since being arrested in November for allegedly underreporting his compensation.
Hong Kong’s Hang Seng Index HSI, +0.10% was up 0.2%. New World Development 0017, +3.32% and Apple component-maker AAC 2018, +2.95% were among the top gainers, while Geely Automotive 0175, -10.59% plunged after reporting a 20% year-over-year increase in sales for 2018, but forecasting slower growth for 2019.
In mainland China, the Shanghai Composite SHCOMP, -0.26% was down about 0.2% while the smaller-cap Shenzhen Composite 399106, -0.12% was about flat. Trade talks with the American delegation began Monday, and a Chinese official said China is willing to resolve the trade dispute, as long as it is on an equal footing as the U.S., according to CNBC.
“This is the biggest wild card, because you don’t know exactly how these parties are going to reach an agreement,” said Jason Pride, chief investment officer of private clients at Glenmede. “Just keeping the tariffs that have been announced so far and not going ahead with new ones would be a positive surprise for the market.”
South Korea’s Kospi SEU, -0.58% slipped slightly as Samsung shares 005930, -1.68% declined after the tech giant warned its fourth-quarter operating profit will fall 29%, far below analysts’ expectations. That comes less than a week after Apple AAPL, -0.22% warned of a massive revenue shortfall in its holiday quarter. Some analysts fear Samsung’s problems signal a broader slump. “These Samsung results are quite damning, suggesting there are a broader-based retail and manufacturer slowdown afoot,” Stephen Innes, head of Asia Pacific trading at Oanda, said in a Tuesday research note.
Australia’s ASX 200 XJO, +0.69% was up 0.6%, while benchmarks in Taiwan Y9999, -0.28% and Singapore STI, +0.51% were mixed.
In the U.S., stocks extended gains Monday, lifted by buying of retailers and smaller companies after a report showed strong orders last month for service-sector companies, where most Americans work. That helped stocks build on the huge gains they made Friday. The U.S. economy has been a top concern for investors over the last three months, and the strong report on service companies showed that banks, health care and construction companies were holding up well. The S&P 500 SPX, +0.70% added 0.7% to 2,549.69. The Dow Jones Industrial Average DJIA, +0.42% climbed 0.4% to 23,531.35 and the Nasdaq COMP, +1.26% gained 1.3%, to 6,823.47. The Russell 2000 jumped 24.62 points, or 1.8 percent, to 1,405.37.
Oil prices continued their recent rally. U.S. crude CLG9, +0.21% gained 8 cents to $48.60 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1.2 percent to $48.52 per barrel in New York. After sinking to an 18-month low of $42.53 a barrel on Dec. 24, the price of U.S. crude has risen for seven of the last eight trading days. Brent crude LCOH9, +0.23% , used to price international oils, also added 8 cents to $57.41 per barrel after rising 0.5 percent in London.
The dollar USDJPY, +0.27% rose to 108.92 yen from 108.73 yen. The euro slipped to $1.1438 from $1.1475.
