HONG KONG, Jan 15 — Asian markets fell today as investors took their foot off the pedal following weeks of gains, with focus on the signing later in the day of the China-US trade deal.

While the mood on trading floors was broadly upbeat as tensions between the economic superpowers eased, analysts warned there will not likely be much more progress on the next phase of talks ahead of the US presidential election in November.

The mini pact, which has de-escalated a two-year standoff that has jolted the global economy, saw the White House halve tariffs imposed on September 1 on US$120 billion of Chinese goods and cancel another round set for December 15.

In return, Beijing pledged vast sums to buy US products including pork and soybeans.

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Still, the next round of negotiations is expected to be the toughest, with key issues including China’s massive subsidies for state industry and forced technology transfer proving key sticking points.

Treasury Secretary Steven Mnuchin denied a report that it could include provisions to roll back more levies on China after the presidential vote, with progress on phase two the key to measures being removed.

But he did tell Fox Business network: “I think phase one is an enormous step in the right direction.”

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Officials said full details would be made public after the signing ceremony in Washington.

‘Constructive process’

“We should not expect further tariff relief until after the November presidential elections, suggesting that today’s agreement is probably as good as it gets for 2020,” said National Australia Bank’s Tapas Strickland.

But he added: “Importantly for China... the deal will allow it to re-focus on its domestic economy which should reduce fears of a slowing economy.”

However, Markets.com analyst Neil Wilson, warned that the year could see fresh volatility.

“It’s possible that instead we see Trump threaten China more, dangling the prospect of abandoning the deal and taking an even tougher stance going into the election,” he said in a note.

With few other catalysts to drive buying today, regional markets tracked a weak lead from Wall Street.

Tokyo and Shanghai both ended down 0.5 per cent, while Hong Kong was off 0.4 per cent.

Seoul and Singapore each dropped 0.4 per cent, while there were also deep losses in Mumbai, Taipei, Bangkok, Jakarta and Manila, though Sydney and Wellington rose.

Still, with most negative headlines in the rear view mirror, analysts were upbeat.

“Right now we are in a more constructive process,” Omar Aguilar, at Charles Schwab, told Bloomberg TV.

“While the uncertainty is still there, the fact that there’s a laid-out plan for phase one and phase two has already been priced by the market and there is a positive view.”

In early trade, London and Paris both rose 0.2 per cent, while Frankfurt was flat.

Key figures at 0820 GMT

Tokyo – Nikkei 225: DOWN 0.5 per cent at 23,916.58 (close)

Hong Kong – Hang Seng: DOWN 0.4 per cent at 28,773.59 (close)

Shanghai – Composite: DOWN 0.5 per cent at 3,090.04 (close)

London – FTSE 100: UP 0.2 per cent at 7,633.51

Pound/dollar: UP at US$1.3029 from US$1.3019 at 2145 GMT

Euro/pound: DOWN at 85.44 pence from 85.46 pence

Euro/dollar: UP at US$1.1135 from US$1.1126

Dollar/yen: DOWN at 109.93 yen from 109.98

Brent Crude: DOWN 15 cents at US$64.34 per barrel

West Texas Intermediate: DOWN 16 cents at US$58.07 per barrel

New York – Dow: UP 0.1 per cent at 28,939.67 (close)

— AFP