Asian stock markets were flat to lower Thursday after President Donald Trump suggested a costly tariff war with China could be resolved soon.
Markets in Japan, South Korea and Hong Kong rose in early trading but gave up their gains by midday. Shanghai declined as traders took profits ahead of a weeklong holiday.
U.S. stocks rebounded Wednesday after Trump told reporters China wants “to make a deal very badly” and it “could happen sooner than you think.”
“Investors have been ‘trade war’ bearish for so long that any sliver of optimism is cheered,” said Stephen Innes of AxiTrader in a report.
Tokyo’s Nikkei 225 was up 0.1% at 22,048.24 while Hong Kong’s Hang Seng gained 4.6 points to 25,945.67.
The Shanghai Composite Index lost 0.7% to 2,935.98. Traders took profits before trading halts next week for the National Day holiday following an extended rise in prices, especially for tech stocks.
“To avoid uncertainty, funds will sell and pocket their money,” the China Securities Journal said on its website.
Seoul’s Kospi was up 1 point at 2,072.43 while Sydney’s S&P-ASX 200 retreated 0.5% to 6,674.80. India’s Sensex added 1% to 38,996.36.
Taiwan gained while Singapore and New Zealand retreated.
The U.S.-Chinese dispute over Beijing’s trade surplus and technology ambitions has fueled anxiety the global economy could tip into recession. Both sides have raised tariffs on billions of dollars of each other’s goods, hurting factories and farmers on both sides.
Negotiators are due to meet next month in Washington for a 13th round of talks. Economists say a temporary deal is possible but a final settlement is unlikely this year.
Trump signed a trade deal with Prime Minister Shinzo Abe of Japan on Wednesday that covers farm, industrial and digital trade but leaves tariffs on autos and parts at 2.5%.
That prompted Japanese automakers to appeal to their government for more support. The deal caps negotiations that began last year after Trump complained about Japan’s trade surplus with the United States and threatened higher tariffs and other measures.
The deal with Japan “suggests the president is open to an ‘interim’ trade deal, possibly signaling he is willing to negotiate one with China,” said Innes.
On Wall Street, the benchmark Standard & Poor’s 500 index gained 0.6% to 2,984.87. The Dow Jones Industrial Average gained 0.6% to 26,970.71. The Nasdaq climbed 1.1% to 8,077.38.
Markets rose despite the release of a summary of a July phone call between Trump and Ukraine’s president that is at the center of a congressional impeachment inquiry into the American leader.
Investors “largely shrugged off Trump’s impeachment proceedings,” said Mizuho Bank in a report.
The broader market was coming off its worst day of the month, when a weak consumer confidence report, more trade war rhetoric and the start of the impeachment inquiry rattled investors.
The congressional probe might complicate White House efforts to resolve trade disputes with China and other nations.
ENERGY: Benchmark U.S. crude lost 15 cents to $56.34 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 80 cents on Wednesday to close at $56.49. Brent crude, used to price international oils, shed 16 cents to $61.27 per barrel in London. The contract declined 69 cents the previous session to $61.43.
CURRENCY: The dollar declined to 107.65 yen from Wednesday’s 107.75 yen. The euro gained to $1.0951 from $1.0944.