The trade war between two macro economies, U.S and China which had lasted for 16 months in which both countries slapped tariffs on their respective goods seemed to make a headway last few weeks when reports came through that the two countries were nearing a preliminary phase of the trade deal and the tariffs on the goods will be reversed.
However, in a twist, an air of uncertainty hovered above the deal as many speculated that the U.S unwillingness to remove some certain tariffs which many seemed to draw that premise from U.S. white house spoke woman’s interview with a major news channel, which was later corroborated by President Trump himself.
Investors were taken aback as uncertainty rose as to when the preliminary deal will be signed. In recent news, U.S. President as quoted declared that the preliminary deal will happen soon while revealing that he may slap more tariffs on Chinese goods if the deal doesn’t pull through.
Asian Market Takes a Plunge
In the wake of this news, the Asian market took a plunge. The Shanghai Composite Index SHCOMP now stands at 0.31% to 2,908.63, Nikkei 225 NIK, standing now at -1.75% to 23,303.13 while Hang Seng HSI, previously -1.82% slipped by 1.9% to 26,549.
Kospi 180721,standing previously at -0.86% fell by 0.8% to 2,124.68 and Sydney’s S&P-ASX 200 XJO, standing previously at 0.81% took a retreat by 0.6% to 6,715.70. Taiwan Y9999 now stands at -0.46%, Singapore STI before -0.83% took a plunge.
Nissan 7201, standing previously at -0.50% retreated while yet to recover from last year 70% incomes and revenue drop. Fast Retailing 9983 and Inpex 1605, standing in negatives previously also fell. As well as LG Electronics and Foxconn.
Hong Kong’s real estate stocks like New World Development 17, Wharf Real Estate 199 and Sino Land Co. 83, were dealt a blow given the increased unrest in Hongkong.
On the other end, the news had a little impact on the U.S. markets as the USD paired with the Japanese yen which previously had a market gain of 0.09% held steady at 109.06 yen, a slight increase from Tuesday’s 109.01 yen.
In the last five weeks, the bulls tested the U.S. markets as the benchmark S&P 500 index of the Wall street SPX having a previous gain 0.16% topped a 3,100 level high but had a slight drop to end at 3,091.84.DJIA held steady at 27,691.49 while The Nasdaq COMP recorded a gain of 0.3% to stand at 8,486.09. The stocks took a bullish trend likewise. However Benchmark US Crude took a bearish turn likewise NewZealand NZ50GR.
Later this week, the U.S. will release October inflation figures while analysts predict a rise in retail sales for October. In view also is Powell’s testimony to U.S. Congress on Wednesday while hopes are held that Federal reserve will hold steady on its interest rates reduction.
Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.