BANGKOK—Jan 28, 2019—Shares fell in Europe early Monday after Asian markets retreated from early gains on caution over China-U.S. trade talks and over the ability of congressional negotiators to forge a government funding bill acceptable to President Donald Trump.
KEEPING SCORE: Germany‘s DAX lost 0.3 percent to 11,249.21 and the CAC 40 in France gave up 0.4 percent to 4,907.13. The FTSE 100 in Britain was flat at 6,811.94. Wall Street looked set for a slow start to the week, with the future contract for the Dow Jones industrial average down 0.4 percent to 24,590.00 and that for the S&P 500 also 0.4 percent lower at 2,652.00.
TRADE TALKS LOOM: Talks aimed at resolving the impasse over Chinese technology ambitions and other issues are due to resume in Washington later in the week, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. Analysts say there might be moves to trim China’s massive trade surplus with the U.S. that could stave off further hikes in punitive tariffs imposed by both sides. However, they expect gaps to remain on key problems such as China’s blueprint for state-led development of leading technologies.
U.S. GOVERNMENT RE-OPENS: There was muted reaction in U.S. markets on Friday to news that Trump and congressional leaders had reached a deal to reopen the federal government for three weeks while talks continue over the president’s demands for money to build a wall along the U.S. border with Mexico. Doubts that they can reach agreement deepened after Trump told the Wall Street Journal in an interview that chances the congressional negotiators can craft a deal he’d accept were “less than 50-50.”
ANALYSTS’ VIEWPOINT: “So the US government being ‘open’ again is a relief. But the greater challenge ahead is to prevent another shut-down come 15th Feb. and to that end, headway in talks between Republicans and Democrats over the next three weeks is critical,” Mizuho Bank said in a commentary.
ASIA’S DAY: Japan’s Nikkei 225 stock index sank 0.6 percent to 20,649.00. Hong Kong’s Hang Seng index was flat at 27,576.96 and the Shanghai Composite index declined 0.2 percent to 2,596.98. The Kospi in South Korea was flat at 2,177.30 while India’s Sensex plunged 0.9 percent to 35,712.04. Shares rose in Taiwan but fell in Southeast Asia. Australia’s markets were closed for a national holiday.
JAPAN-ECONOMY: Shares fell in Tokyo as the parliament convened and Prime Minister Shinzo Abe laid out plans to cope with adverse factors such as a sales tax hike due in October and longer-term demographic trends. Finance Minister Taro Aso pledged to use “every policy tool at our disposal” as he sought support for a budget that includes 2 trillion yen ($18 billion) in stimulus to counter an Oct.
1 increase in the sales tax to 10 percent from the current 8 percent.
ENERGY: U.S. crude oil shed $1.03 to $52.66 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1.1 percent to settle at $53.69 per barrel on Friday. Brent crude, used to price international oils, gave up $1.14 to $60.50 per barrel. It had gained 0.9 percent on Friday to $61.64 per barrel.
CURRENCIES: The dollar was trading at 109.41 yen, down from 109.55 yen on Friday. The euro strengthened to $1.1408 from $1.1409.