BEIJING, China – Asian market skidded lower on Thursday amid the growing concerns about the US-China trade negotiations.
Shares in Asia tracked moderate dips during the trading session on Thursday due to growing concerns of market players over the possibility that phase one of the trade talks between the US and China wouldn’t be finalized before the year ends.
Hong Kong’s Hang Seng index led to the decline in Asian stocks with its 1.6% drop to 26,450.00 value. Japan’s Nikkei 225 index also fell about 0.5%, dropping its value towards 23,038.58, while the Shanghai Composite index dipped 0.3%, going down to 2,902.22 value.
A published report by Reuters suggested that phase one of the trade agreement may not be finalized before the year ends as both the US and China continue to wrestle about their disagreements. The report cited an unnamed official in the Trump administration saying that there’s a possibility that an agreement will not be reached this year, but more likely that both countries will agree on something.
The report has spooked the already twitchy market after the comments from both countries previously, suggesting more issues that need to be addressed before a deal will be reached. It was only yesterday that the market experienced a significant drop after the statement from US President Trump stating a possible increase in tariffs on Chinese goods if a trade deal isn’t reached before the year ends. It was also followed by the Chinese government condemning a US Senate “anti-China” legislation for interfering in what political unrest has been going on in Hong Kong for months, which further affected the market negatively.
According to Jeffrey Halley of Oanda, the Asian market has been nervous about any updates about the trade deal this week, especially as China’s equities have been underperforming as of late.
Market players have been positively hoping that both countries, holding the biggest economies in the world, can finalize the deal before the expected tariffs Washington is going to enforce on Chinese goods can do more damage to the market.
According to the chief investment officer at Horizon Investments, Scott Ladner, if both countries cannot make a deal before the year ends, the uncertainty in the market will focus on what’s going to happen on December 15, the expected date for the tariff increase.
On Thursday trading, South Korea’s Kospi also has a 1.5% dip towards 2,092.64, while the S&P ASX 200 went down 0.7% towards 6,672.90.