Asia report: Markets drop ahead of US-China trade talks revival

Asian markets fell on Friday after a downbeat session on Wall Street following a slew of disappointing earnings results, with investors wary about renewed trade talks between Washington and Beijing.

Envoys from the two economic giants are set to meet next week, with the Chinese government setting the tone with a commitment to import more US farm products, an issue that was decisive in causing prior negotiations to fall apart.

Japan's Nikkei 225 finished the session down 0.45% at 21,658.15 as car manufacturing giants Nissan and Honda dropped by 3.2% and 2.0% respectively, after the former announced plans to layoff 12,500 employees worldwide.

Meanwhile, the Japanese yen edged 0.03% lower against the US dollar to Y108.66.

China's Shanghai Composite climbed 0.24% to 2,944.54, while the tech-heavy Shenzhen Composite ended flat at 1,573.45.

Hong Kong's Hang Seng index dropped 0.69% to 28,397.74 as tech-component maker AAC fell by 1.5% and oil firm CNOOC finished the session 0.8% lower.

South Korea's Kospi fell 0.40% to 2,066.26 after a report from Kyodo News said that Japan will remove the country from its list of most-favoured trading partners on 2 August, with tensions between the two nations having been inflamed by a number of recent incidents such as a Korean court's ruling that Japanese companies must pay compensation for forced-labour practices before and during World War II.

Down under, the Australian S&P/ASX200 was down 0.36% at 6,793.39 despite sizeable gains for miners as tech stocks fell by more than 1.5%. Companies such as Appen, Afterpay, Altium and Xero fell by as much as 3.8% after disappointing earnings reports from US counterparts.

New Zealand's S&P/NZX50 dropped 0.83% to 10,807.61, with the index led lower by Sky Network Television, which fell by 3.2% as investors were unconvinced by the pay-TV operator’s plans to get into online streaming.

Greg Smith, head of research at Fat Prophets, said: "The move into streaming was a strong one by the new CEO but the market doesn’t agree."

Finally, the Australian dollar fell 0.33% against the US dollar to A$1.44, while New Zealand's dollar dropped by the same percentage against the greenback to NZ$1.51.