Hope for US-China deal pushes stocks higher
BANGKOK (AP) — Shares have declined in most Asian markets, tracking an overnight sell-off on Wall Street.
But stocks in Shanghai and Shenzhen advanced early Tuesday after the government set an ambitious target for growth this year that implies strong government support for the economy.
The Shanghai Composite index rose 0.1 percent to 3,031.00, while the benchmark in Shenzhen, a smaller, more domestic-oriented market jumped 0.8 percent to 1,685.17.
Chinese Premier Li Keqiang told the annual session of the country’s rubber-stamp parliament that the government was setting a growth target in a range of 6 to 6.5 percent. That shows official determination to shore up the cooling economy and prevent politically hazardous job losses and is slightly below last year’s 6.6 percent growth, a three-decade low.
Li promised higher spending on technology development. Beijing is also aiming to raise military spending by 7.5 percent.
Elsewhere in Asia the focus was mainly on an absence of news of fresh progress in China-U.S. trade talks.
Japan’s Nikkei 225 index lost 0.5 percent to 21,714.70 and the Hang Seng in Hong Kong edged 0.1 percent lower to 28,932.74. South Korea’s Kospi dropped 0.5 percent to 2,178.75.
Australia’s S&P ASX 200 fell 0.3 percent after the central bank opted to keep its key policy rate at 1.5 percent. Shares fell in Taiwan and most of Southeast Asia.
The upward momentum from Asia on Monday faded as investors grew impatient for more details on reports that the U.S. and China are moving closer to a deal to resolve their costly trade dispute.
The world’s two largest economies have pulled back from an immediate escalation of their damaging trade war, with President Donald Trump postponing a deadline for raising tariffs on more Chinese goods, citing progress in a series of talks. Media reports say the nations could strike a deal this month.
Investors have been hoping for a resolution in the long-running trade dispute between the world’s biggest economies, which centers on China’s technological ambitions. Washington claims Beijing is stealing technology and forcing companies to turn over technology in order to do business.
“The devil is still in the details and those details are still pretty sparse at this point,” said David Lefkowitz, senior Americas equity strategist at UBS Global Wealth Management. “When tariffs might be removed is definitely a key question, and also there’s still some uncertainty about whether or not a deal will be consummated.”
The sell-off Monday centered mainly on health-related and technology shares that have made the most gains recently.
The S&P 500 index dropped 0.4 percent to 2,792.81. The index, a benchmark for many mutual funds, is still up 11.4 percent so far this year.
The Dow Jones Industrial Average fell 0.8 percent, to 25,819.65, while the Nasdaq composite lost 0.2 percent to 7,577.57. The Russell 2000 index of smaller companies gave up 14.20 points, or 0.9 percent, to 1,575.44.
Major indexes in Europe finished mostly higher.
ENERGY: U.S. crude lost 30 cents to $56.29 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1.4 percent Monday to settle at $56.59 a barrel in New York. Brent crude, used to price international oils, fell 28 cents to $65.39 a barrel.
CURRENCIES: The dollar rose to 111.91 yen from 111.74 yen on Monday. The euro weakened to $1.1327 from $1.1341.
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AP Business Writers Damien J. Troise and Alex Veiga contributed.
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