ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Nikkei Markets

Asian stocks fall amid uncertainty over US-China trade

Investors also await Federal Reserve policy decision

HONG KONG (Nikkei Markets) -- Asian shares fell Wednesday ahead of the Federal Reserve's policy decision even as lingering uncertainty over U.S.-China trade negotiations damped investor appetite.

The Nikkei Asia300 Index of companies outside Japan slipped 0.1% to 1,330.36.

The decline in Asian equities came after a rally on Wall Street came unstuck amid a report by Bloomberg that U.S. officials were worried that China was pushing back against American trade demands. The report, citing people familiar with the negotiations, said that Chinese officials shifted their stance because they had not received assurances from the Donald Trump administration that tariffs imposed on Chinese shipments would be lifted after agreeing to changes to the intellectual-property policies. Beijing had further stepped back from its initial promises over data protection of pharmaceuticals and refused to give ground on data-service issue, the report added.

Michael McCarthy, the chief market strategist at CMC Markets and Stockbroking, said that the "trade rumbles" were stirring caution, with reports of trade tensions contradicting White House assertions that talks with China were going well.

"Sensitivity to any news on trade is heightened by a lack of major data releases," he said. "Although less likely, any decision by authorities in China to take this discussion (highlighting hurdles to a trade agreement) public could rattle markets."

The S&P 500 Index ended little changed on Tuesday.

Meanwhile, the Fed later Wednesday is expected to leave interest rates unchanged and trim its projections for future rate increases. Economists expect the U.S. central bank to cut its projections for rate increases to one from two forecast in December. The Fed is further expected to formally announce that it will halt its bond holding reduction program.

"We expect the Fed to stay on hold and deliver another dovish message through the statement and revisions to the forecasts," Bank of America Merrill Lynch said in a note. "The dots should show a shallower path of rates (1 in 2019 and 1 in 2020). We see some risk of a more dovish path."

In major losers on the A300 index on Wednesday, Hong Kong-shares of China Overseas Land & Investment fell 2% despite reporting 10.1% increase in net profit for 2018.

China Resources Beer climbed 1.7%. The company's 2018 net profit fell 16.9% on year amid higher selling and distribution expenses.

Samsung Electronics closed 0.3% higher after falling 1.8% earlier. Reuters cited the South Korean company's CEO as saying that that he expects stagnant growth amid slowing global economic growth and long replacement cycle in 2019 smartphone market.

HCL Technologies closed 0.4% higher. The Indian software exporter said late Tuesday that it had signed a seven-year agreement with U.S.-based Xerox to manage a part of its shared services.

--Nimesh Vora

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media