Asian stocks and Wall Street futures fell on Wednesday, as confusing signals over the extent of progress made in U.S.-China trade talks and concern about intensifying unrest in Hong Kong hurt demand for risky assets.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell
1.03% to the lowest in more than a week. Hong Kong shares slumped 2% to a four-week low, battered by fears that anti-government protests appear to be spiraling out of control.
The pan-region Euro Stoxx 50 futures were down 0.57%, German DAX futures were off 0.58%, and FTSE futures fell 0.54%.
The dollar drifted in Asia after U.S. President Donald Trump said a trade deal was “close” but gave no new details on when or where an agreement would be signed, disappointing investors in what was billed as a major speech on his administration’s economic policies.
Trump also rattled some investors by threatening China with even more tariffs if they do not sign a deal.
Oil prices fell as diminishing prospects for an immediate resolution to a 16-month long trade war between the world’s two-largest economies suggested less demand for energy in the future.
Expectations for a “phase one” trade deal some time this month have been a key factor supporting stocks and riskier assets recently. However, the lack of material progress on an agreement has only increased doubts about whether a trade deal will take place at all. “I’m absolutely concerned. The clock is ticking,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“Markets are now expecting substantial progress in the next week or so, and if not, then confidence could crumble. There are diverging interpretations of Trump’s comments. I tend to go with commodities like oil and copper because they are plugged in to global demand, so their fall is significant.”
- Reuters
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