Asian stocks decline as ‘warm fuzzy feeling’ of US-China trade agreement fades
- Stocks in Japan, South Korea and Australia fell in morning trade.
- Questions remain about the actual details of the trade agreement struck between U.S. President Donald Trump and Chinese President Xi Jinping.
Stocks in Asia slipped Tuesday in morning trade amid uncertainty about the future of U.S.-China trade relations.
Japan’s Nikkei 225 declined by 0.14 percent in early trade while the Topix index shed 0.25 percent. Meanwhile in South Korea, the Kospislipped 0.21 percent.
Over in Australia, the ASX 200 recovered partially from early losses but still traded down by 0.16 percent in the morning, with almost all sectors in negative territory.
The heavily weighted financial subindex in Australia slipped 0.25 percent. The Reserve Bank of Australia is set to announce its policy decision on interest rates at 11:30 a.m.
Confusion on US-China trade agreement
Overnight on Wall Street, the major indexes saw gains. The Dow Jones Industrial Average advanced 287.97 points to close at 25,826.43 while the S&P 500 rose 1.1 percent to finish the trading day at 2,790.37. The Nasdaq Composite rose 1.5 percent to close at 7,441.51.
The moves came after U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day postponement of any new tariffs in the trade war that has weighed heavily on global stock markets for most of 2018.
*Oil prices extend gains on expected OPEC-led production cuts*
Oil prices rose on Tuesday, extending strong gains from the previous day amid expected OPEC-led supply cuts and a mandated reduction in Canadian output.
The 90-day truce in the trade dispute between the United States and China was also still supporting markets, traders said.
U.S. West Texas Intermediate (WTI) crude futures were at $53.20 per barrel , up 25 cents, or 0.5 percent, from their last close.
Both crude benchmarks climbed by around 4 percent the previous session after Washington and Beijing agreed a truce in their trade disputes and said they would negotiate for 90 days before taking any further action.
The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) will on Dec. 6 meet at its headquarters in Vienna, Austria, to agree a joint output policy. It will also discuss policy with non-OPEC production giant Russia.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.040 after touching lows around 96.7 earlier.
The Japanese yen was at 113.59 against the dollar after seeing highs around the 113.4 handle in the previous session. The Australian dollar traded at $0.7357 after touching highs at about $0.739 yesterday.
The People’s Bank of China (PBOC) set the yuan reference rate at 6.8939 vs the previous day’s fix of 6.9431.