Asian stocks retreat as China-U.S. jitters set in

Annabelle Liang, The Associated Press
Published Tuesday, May 28, 2019 11:47PM EDT

SINGAPORE -- Asian shares slipped Wednesday on expectations that a trade dispute between China and the United States would simmer and possibly weigh on growth.

With a lull in economic releases closer to home, investors digested President Donald Trump's comments that the country was "not ready" for a trade deal with China. Trump spoke to reporters in Tokyo on Monday.

Japan's benchmark Nikkei 225 gave up 1.1% to 21,020.72. The Kospi in South Korea tumbled 1.3% to 2,021.84 and Hong Kong's Hang Seng was 0.5% lower at 27,267.94.

The Shanghai Composite fell 0.3% to 2,900.71 while Australia's S&P/ASX 200 eased 0.8% to 6,433.30. Stocks fell in Taiwan and Singapore but advanced in Indonesia.

Earlier this month, China and the U.S. concluded their 11th round of trade talks with no agreement. The U.S. has since raised tariffs on Chinese exports, triggering retaliation from China.

The Trump administration has also mounted sanctions on Huawei. But it refrained from labelling China or any other country as a currency manipulator in a report to Congress on Tuesday.

"To some extent, the sparing of China as a currency manipulator had been expected but provides some relief for one watching the U.S.-China trade impasse," Jingyi Pan of IG said in a market commentary.

She added that China's official PMI for May, which will be released on Friday, would be watched an indicator of the initial impact of tariffs on growth.

Over on Wall Street, stocks closed broadly lower as investors who felt jittery about long-term growth shifted money into bonds. The yield on the benchmark 10 year Treasury fell to 2.26%, its lowest level since September 2017.

The broad S&P 500 index slipped 0.8% to 2,802.39 on Tuesday. The Dow Jones Industrial Average shed 0.9% to 25,347.77 and the Nasdaq composite was down 0.4% at 7,607.35. The Russell 2000 index of smaller company stocks retreated 0.7% to 1,504.02.

ENERGY: Benchmark U.S. crude lost 63 cents to $58.51 per barrel. The contract rose 51 cents to $59.14 per barrel on Tuesday. Brent crude, the international standard, fell 57 cents to $68.10 per barrel. It settled 10 cents lower at $68.67 per barrel in the previous session.

CURRENCIES: The dollar strengthened to 109.38 yen from 109.36 yen late Tuesday. The euro jumped to $1.1166 from $1.1161.

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