Asia report: China markets fall despite positive trade news

Markets in Asia closed flat to lower on Monday, as stocks in China tumbled even after weekend developments that boosted optimism on the trade front.

In Japan, the Nikkei 225 eked out gains of 0.02% to 23,821.11, as the yen advanced 0.02% to last trade at JPY 109.42.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.66%, Uniqlo owner Fast Retailing lost 0.09%, and technology conglomerate SoftBank Group was 0.24% weaker.

The broader Topix index was 0.21% lower by the end of trading in Tokyo, closing out its trading session at 1,729.42.

On the mainland, the Shanghai Composite was down 1.4% at 2,962.75, and the smaller, technology-heavy Shenzhen Composite lost 1.92% to close at 1,667.71.

Authorities in Beijing said they would lower import tariffs on more than 850 different products from 1 January, including frozen pork, as the country continues to grapple with a pork shortage amid an outbreak of African swine fever.

The country said it would also lower tariffs on a number of information technology products from 1 July.

South Korea’s Kospi slipped 0.02% to settle at 2,203.71, while the Hang Seng Index in Hong Kong went against the regional trend to rise 0.13% to 27,906.41.

The blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 0.89% and chipmaker SK Hynix off 0.42%.

The trade war between the US and China dominated the agenda in the first session of the Christmas week, after Donald Trump said on Friday that he had “a very good talk” with Xi Jinping over the first phase trade deal the two countries reached earlier in the month.

That suggested to markets that progress had been made towards a concrete, final agreement since the two countries reached their initial agreement.

The US president said China had begun the large-scale agricultural purchases it had promised as part of the deal, and added that a finalised deal was being prepared.

On Saturday, he said Beijing and Washington would sign the deal “very shortly”.

Oil prices were higher at the end of the Asian session, with Brent crude last up 0.11% at $66.21 per barrel, and West Texas Intermediate rising 0.07% to $60.48.

In Australia, the S&P/ASX 200 lost 0.46% to 6,785.10, as the major miners tumbled in the sunburnt country.

BHP was down 1.26% in Sydney trading, as Fortescue Metals lost 1.19% and Rio Tinto was off 1.77%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.6% higher at 11,547.23, led higher by retirement property developers and operators after an improved takeover bid for Metlifecare emerged.

Trading in Metlifecare shares was halted before the Wellington bourse opened, as its board said it had “substantially negotiated” a scheme implementation arrangement for the offer, which it said was better than the NZD 6.50 per share received and rejected last week.

That boosted Metlifecare’s peers, with Arvida Group up 4.1%, Oceania Healthcare ahead 5.1%, Ryman Healthcare 0.6% firmer, and Summerset Group advancing 4.4%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.28% at AUD 1.4454, and the Kiwi advancing 0.23% to NZD 1.5109.