Uncertainty in the global geopolitical scenario has returned, leading to the selling of technology shares on Wall Street and a decline in Asian stock markets on Wednesday.
Chinese markets retreated after US President Donald Trump cast doubt on whether or not he will meet with Chinese leader Xi Jinping later this month, saying, “Maybe it won’t happen, maybe it won’t happen,” while hosting a lunch for Republican Party senators at the White House.
However, Trump also said he was expecting “to do well” in negotiations with China.
“I'm going to see President Xi in two weeks... We’re going to meet in South Korea,” he said, adding, “We’re going to talk about a lot of things they want to discuss.”
Trump is travelling to Japan and South Korea, in part, to finalise the terms of investments from those countries as part of an agreement to minimise the tariff rates Trump is charging on foreign goods. But, the uncertainty regarding his trip and meeting pulled down shares in Asia.
Hong Kong’s Hang Seng dropped 1 per cent to 25,769.83, while the Shanghai Composite index shed 0.3 per cent to 3,903.01.
Japan’s benchmark Nikkei 225 wavered between slight gains and losses a day after its parliament chose Sanae Takaichi to be its first female prime minister.
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It had gained less than 0.1 per cent by midafternoon, to 49,332.24, pulled lower by declines for tech companies like SoftBank Corp, whose shares fell 4.8 per cent.
The government reported that Japan’s exports grew 4.2 per cent in September from a year earlier, boosted by robust shipments to Asia that offset a 13 per cent decline in those destined for the US Auto shipments fell 24 per cent as they were hit hard by Trump’s tariff hikes.
Australia’s S&P/ASX 200 lost 0.9 per cent to 9,012.30, while South Korea’s Kospi rose 1 per cent to 3,861.65.
US futures edged higher, while crude oil prices rose about $1 a barrel.
The S&P 500 inched up a fraction of a point, leaving it just slightly below its all-time high set earlier this month, at 6,735.35. The Dow Jones Industrial Average rose 0.5 per cent to 46,924.74 and the Nasdaq composite slipped 0.2 per cent to 22,953.67.
While General Motors rallied 15.1 per cent after reporting stronger quarterly results than analysts expected, it also raised its forecasts for some full-year financial targets. Warner Bros. Discovery leaped 10.9 per cent after the company said it’s now considering other options besides its previously announced split of Discovery Global off Warner Bros, which could be more profitable for shareholders.
But keeping the market in check were drops for some Big Tech stocks, which lost momentum following their own rallies. Google’s parent company, Alphabet, dropped 2 per cent from its all-time high; as did Broadcom, also falling 2 per cent.
Corporate earnings reports also can provide details on the strength of the US economy at a time when the US government's shutdown has delayed important economic updates. That's making the job of the Federal Reserve more difficult, as it tries to decide whether high inflation or the slowing job market is the bigger issue for the economy.
Despite the shutdown, the Commerce Department will release its consumer prices report on Friday, which could help guide the Fed’s interest rate policy. It will be the government’s first data release since the shutdown began on Oct 1.
In other dealings early Wednesday, the price of gold was up 1.1 per cent at $4,152.70 per ounce. It fell 5.7 per cent from its latest record on Tuesday but is up more than 56.4 per cent for the year.
Benchmark US crude oil rose 98 cents to $58.22 a barrel. Brent crude, the international standard, jumped $1 to $62.32 a barrel.
The US dollar fell to 151.75 Japanese yen from 151.93 yen. The euro cost $1.1610, up from $1.1600.
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