Asia report: Markets mixed amid fresh caution over trade

Markets in Asia were mixed on Tuesday, as investors exercised caution amid concerns that the apparent partial trade agreement between the US and China, which saw stocks rally on Monday, could be in jeopardy.

In Japan, the Nikkei 225 was ahead 1.87% at 22,207.21, as the yen strengthened 0.18% against the dollar to last trade at JPY 108.21.

Of the major components on the benchmark index, automation specialist Fanuc was up 2.88%, fashion firm Fast Retailing added 3.45%, and technology conglomerate SoftBank Group was 2.45% higher.

The broader Topix index was 1.56% higher by the close of play in Tokyo, settling at 1,620.20, as traders in Japan played catch-up following a public holiday on Monday.

On the mainland, the Shanghai Composite was down 0.56% at 2,991.05, and the smaller, technology-heavy Shenzhen Composite slid 1.1% to 1,641.94.

Fresh data out of China showed the country’s consumer price index was up 3% year-on-year for September, while the producer price index declined 1.2%.

The standout figure was the price of pork, which rocketed 69% year-on-year amid ongoing shortages of the meat, as China continued to grapple with an outbreak of African swine fever.

South Korea’s Kospi eked out gains of 0.04% to 2,068.17, while the Hang Seng Index in Hong Kong slipped 0.07% to close at 26,503.93.

Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 0.2% and SK Hynix rising 0.87%.

Reports that Washington and Beijing had reached an agreement for a so-called first phase trade agreement over the weekend had cold water thrown on them on Tuesday, as it emerged China wanted another round of talks before signing on the dotted line.

US president Donald Trump had announced the partial trade agreement last week, which reportedly addressed American concerns around financial services and intellectual property, and would see the People’s Republic buy between $40bn and $50bn of US agricultural goods.

In return, the White House said it would cancel the planned increase in punitive tariffs on $250bn worth of Chinese products to 30% from 25%, at least until the next deadline on 15 December.

“Speculation remains that Presidents Trump and Xi are likely to sign a finalised deal at the Asia-Pacific Economic Cooperation summit in November, but that the tone between the two nations remains fragile,” said analysts at Rabobank.

Oil prices were lower as the region went to bed, with Brent crude last down 1.35% at $58.56 per barrel, and West Texas Intermediate falling 1.61% to $52.74.

In Australia, the S&P/ASX 200 managed gains of 0.14% to close at 6,652.00, with gains in the hefty financials subindex of 0.29% offsetting losses of 0.85% for the energy sector and 1% for materials plays.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.17% at 11,045.34, as shares in subscription broadcaster Sky - not related to its London-based namesake - remained stable a day after it confirmed it had secured a broadcasting deal with New Zealand Rugby.

Sky’s share price has languished in recent months as it lost a number of drawcard sports rights to rivals, including domestic cricket and the current Rugby World Cup tournament - the country’s largest television event.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.24% at AUD 1.4793 and the Kiwi retreating 0.28% to NZD 1.5920.