Asia markets mixed as investors look to US-China trade talks this week

Asia markets were mostly higher in mid-day trading on Tuesday, following gains on Wall Street overnight. Investors will be keeping an eye on trade talks between U.S. and Chinese representatives this week.

Nikkei 225 reversed early losses to trade up 0.35 percent while the Topix index traded near flat at 1,691.1.

South Korea’s Kospi rose 0.92 percent as tech stocks led gains. Shares of Samsung Electronics were up 2.17 percent, chip-maker SK Hynix added 4.28 percent and LG Electronics rose 0.8 percent. But major carmaker Hyundai Motor fell 1.6 percent and the state-run Korea Electric Power Corporation declined 1.6 percent.

Meanwhile, stock market operator Korea Exchange is reportedly looking into Merrill Lynch’s Seoul operation over alleged unfair stock trades.

Markets in the Greater China region also traded in positive territory.

Hong Kong’s Hang Seng index gained 0.48 percent. On the mainland, the Shanghai composite was up 1.43 percent and the Shenzhen composite rose 1.32 percent, extending Monday’s gains.

“Chinese equities rebounded after the banking regulator (called) for banks to boost lending in order to support infrastructure projects and exporters,” Huani Zhu, an economist from Mizuho Bank, wrote in a morning note. “This suggests that the government is likely to utilize various policy tools to cushion any downside risk to growth.”

The China Banking and Insurance Regulatory Commission posted a statement on its website that called for institutions to raise the proportion of medium and long-term loans so that borrowers are not strained at the end of the month or quarter, reports said.

In Australia, the benchmark ASX 200 declined 1 percent with most sectors falling. The energy sector was down 1.86 percent, materials was lower by 1.44 percent and the heavily weighted financials subindex fell 1.3 percent. Major banking and mining stocks were down.

The Australian dollar traded at $0.7352 at 12:21 p.m. HK/SIN, following the release of the August policy meeting minutes by the Reserve Bank of Australia. The central bank said that since progress on unemployment and inflation was set to be gradual, there was “no strong case” to adjust the monetary policy in the near term.

Earlier this month, RBA left the cash rate unchanged at 1.5 percent and said that business conditions in the economy remained positive while non-mining business investment was increasing. But the bank cautioned against uncertainty in the outlook for household consumption amid high debt levels.

Australian Prime Minister Malcolm Turnbull also survived a leadership challenge for the Liberal Party by Home Affairs Minister Peter Dutton, according to reports. Turnbull won by 48 votes to Dutton’s 35.

In company news, global mining giant BHP announced earnings for the year ended Jun. 30. The miner said its underlying profit rose 33 percent from $6.73 billion to $8.93 billion for the fiscal year. But that number still missed an estimate of $9.27 billion that analysts polled by Thomson Reuters I/B/E/S predicted.

“Across our dramatically simplified portfolio of tier one assets, we see this year’s strong momentum carried into the medium term,” Andrew Mackenzie, CEO of BHP, said in a statement.

BHP shares were down 1.78 percent.

In the currency market, the U.S. dollar index, which tracks the greenback against a basket of currencies, traded at 95.540 at 12:36 p.m. HK/SIN after declining from levels near 97.00 in the previous week.

The index “recorded its fourth consecutive daily decline against a backdrop of improved risk appetite, lower (U.S. Treasury) yields and news that President [Donald] Trump had expressed disappointment with recent Fed hikes,” Rodrigo Catril, a senior foreign-exchange strategist at the National Australia Bank, wrote in a morning note.

In an interview with Reuters, Trump said he disagreed with the Federal Reserve’s decision to raise interest rates, and he said the Fed should do “what’s good for the country.”

Investors will be looking forward to a meeting between U.S. and Chinese representatives this week. Reports said that delegations from Beijing are set to meet with U.S. officials on Aug. 22 and Aug. 23 to try and find ways to resolve an escalating tariff war between the world’s two largest economies. But market commentators said that they expect no major outcomes from this week’s meeting.

Among other currency pairs, the Japanese yen traded at 110.01 to the dollar at 12:43 p.m. HK/SIN, easing from an earlier high of 109.76. Meanwhile, the euro traded at $1.1531, gaining from earlier lows of $1.1477.

Oil prices also advanced during Asian trading hours with global benchmark Brent up 0.07 percent at $72.26 a barrel and U.S. crude gaining 0.35 percent to $66.66.

Here’s a look at the economic data on Tuesday:

  • Hong Kong – July inflation numbers at 4.30 p.m. HK/SIN

— Reuters contributed to this report.

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