The Asian stock market ended the week on a low note, as most shares slipped. The investor uncertainty is being attributed to the recent easing of tensions between the US and China.
Shanghai stocks moved forward after news came out of Beijing that the two countries agreed to roll back tariffs once an interim deal progresses. However, shares relinquished their earlier gains as they slip during the day.
The Shanghai Composite dipped 0.49% to 2,964.18 while the Shenzhen component went down .22% to 9,853.34. Its composite counterpart also dropped .187% to around 1,648.68.
However, Hong Kong dipped, and there was no movement in Tokyo. The Hang Seng index went down .84% in the last hour of trading, and Tencent shares dropped by2.04%. Seoul’s Kospi also went down by 0.2%.
New Zealand, Taiwan, and the majority of Southeast Asian markets also saw a decline. Even Australia’s S&P-ASX 200 dropped 0.2% to 6,714.20.
Mizuno Bank’s Vishnu Varatha said in a report that the deal will be a surprising upside for the world economy if it pushes through. But he also advised caution as no one can “rule out a gap” in where China and the US stand.
According to Varatha, the US Federal Reserve could become “less dovish” if the deal turns out to be more promising than expected. It could lead to reduced tariffs and less pressure on the US economy.
It was a different scenario in Wall Street, though. Unlike its Asian counterparts, the 500 index of Wall Street’s Standard & Poor enjoyed a gain of 0.3% to set a record 3,085.18. It even went up by 0.7% at some point.
The Dow Jones Industrial Average enjoyed a good day as well as it climbed 0.7% to 27,674.80. The Nasdaq composite also ended the day short of its highest after going up by 0.3% to 8,434.52.
The impressive showing was attributed to positive reports on business profits and the US economy. The country’s job market remains strong, and the Fed has reduced interest rates thrice already.
However, the US-China trade war continues to be an unknown but volatile element for the world economy.
Investor concerns were somewhat alleviated recently as Gao Feng, a spokesperson for China’s Ministry of Commerce, said that China and the US have agreed to cancel some tariffs that are presently levied on each other’s products.
Feng also claimed both countries were nearer to a “phase one” agreement after two weeks of negotiations. One US official reportedly gave a similar statement to Reuters. However, the news agency also revealed that the trade deal would face strong opposition within the White House.