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Asia stocks frustrated as trade doubts resurface

Published 11/07/2019, 12:52 AM
Asia stocks frustrated as trade doubts resurface
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By Wayne Cole

SYDNEY (Reuters) - Asian shares napped near multi-month peaks on Thursday while bonds eked out a bounce as reports of delays in sealing a preliminary Sino-U.S. trade deal left investors frustrated at the lack of concrete progress.

In early European trades, the pan-region Euro Stoxx 50 futures were up slightly while those for German DAX were flat. London's FTSE futures rose 0.2%.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped a slight 0.2%, just off a six-month high hit earlier in the week.

Japan's Nikkei dithered either side of flat in very quiet trade, having touched a 13-month top on Wednesday. South Korean stocks eased 0.15% after hitting their highest since May, while Shanghai blue chips lost 0.08%.

E-Mini futures for the S&P 500 eased 0.1%.

Reuters reported on Wednesday a meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign an interim trade deal could be delayed until December as discussions continue over terms and venue.

Among various suggestions was to sign a deal after a scheduled NATO meeting in early December.

"One could take the view that by not committing to meet the original deadline it gives more time for a somewhat more comprehensive agreement to be thrashed out," said Ray Attrill, head of FX strategy at National Australia Bank.

"But markets have understandably jumped the other way, exhibiting a slight loss of confidence that anything more substantial than an agreement not to further lift tariffs, in return for some increase in US agricultural purchases, can be agreed by way of an initial deal."

Wall Street was underwhelmed by the news and the Dow ended Wednesday all but flat, while the S&P 500 gained 0.07% and the Nasdaq dropped 0.29%.

HP Inc (NYSE:HPQ) rose over 6% after Reuters reported U.S. printer maker Xerox (NYSE:XRX) Holdings Corp has made a roughly $33 billion cash-and-stock offer for the computer group.

The pause in the risk rally helped bonds recoup a little of their recent losses. Yields on benchmark U.S. 10-year notes fell back to 1.81% from a two-month top of 1.87%.

That in turn restrained the dollar, which eased to 108.74 yen from a weekly high of 109.24. The dollar was steady on a basket of currencies at 97.965.

The euro was struggling to sustain any bounce at $1.1061, perilously close to chart support at $1.1060.

Spot gold was little changed at $1,490.38 per ounce and well within recent tight trading ranges.

Oil prices nursed losses after taking a hit from a surprisingly large build in U.S. crude inventories.

U.S. crude was 6 cents lower at $56.29 a barrel, while Brent crude slipped 7 cents to $61.67.

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