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GLOBAL MARKETS-Asian stocks hit by trade confusion and HK unrest

Published 13/11/2019, 07:12
© Reuters.  GLOBAL MARKETS-Asian stocks hit by trade confusion and HK unrest
US500
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JP225
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Trump offers no new details on U.S.-China trade pact

* Trade war has taken toll on major economies

* Commodities highlight concern about global demand

By Stanley White

TOKYO, Nov 13 (Reuters) - Asian stocks and Wall Street

futures fell on Wednesday, as confusing signals over the extent

of progress made in U.S.-China trade talks and concern about

intensifying unrest in Hong Kong hurt demand for risky assets.

MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS fell 1.03% to the lowest in more than a week.

Hong Kong shares .HSI slumped 2% to a four-week low, battered

by fears that anti-government protests appear to be spiralling

out of control.

The pan-region Euro Stoxx 50 futures STXEc1 were down

0.57%, German DAX futures FDXc1 were off 0.58%, and FTSE

futures FFIc1 fell 0.54%.

The dollar drifted in Asia after U.S. President Donald Trump

said a trade deal was "close" but gave no new details on when or

where an agreement would be signed, disappointing investors in

what was billed as a major speech on his administration's

economic policies.

Trump also rattled some investors by threatening China with

even more tariffs if they do not sign a deal.

Oil prices fell as diminishing prospects for an immediate

resolution to a 16-month long trade war between the world's

two-largest economies suggested less demand for energy in the

future.

Expectations for a "phase one" trade deal some time this

month have been a key factor supporting stocks and riskier

assets recently. However, the lack of material progress on an

agreement has only increased doubts about whether a trade deal

will take place at all.

"I'm absolutely concerned. The clock is ticking," said

Michael McCarthy, chief market strategist at CMC Markets in

Sydney.

"Markets are now expecting substantial progress in the next

week or so, and if not, then confidence could crumble. There are

diverging interpretations of Trump's comments. I tend to go with

commodities like oil and copper because they are plugged in to

global demand, so their fall is significant."

U.S. stock futures ESc1 fell 0.26% in Asia after the S&P

500 .SPX eked out a 0.16% gain on Tuesday. The S&P 500 and

Nasdaq hit all-time peaks during trading on Tuesday but stocks

ended off session highs after Trump's speech.

Washington and Beijing have imposed tariffs on each other's

goods in a bitter dispute over Chinese trade practices that the

Trump administration says are unfair.

The standoff has roiled global financial markets and raised

the risk of recession for some economies as global trade slows.

In recent weeks, both sides have indicated they were making

progress toward an agreement that would potentially scale back

some tariffs, but a lack of additional information is starting

to unsettle some investors in equities and other riskier assets.

In a reminder of the potential for further friction, Trump

said on Tuesday he would raise tariffs on Chinese goods "very

substantially" if China does not agree a deal.

Onshore spot yuan CNY=CFXS fell to a low of 7.0270 per

dollar at one point in morning trade, the weakest level since

Nov. 5, hurt by the fresh Sino-U.S. trade worries.

Hong Kong stocks .HSI slumped as protesters planned to

paralyse parts of the Asian financial hub for a third day, with

transport, schools and many businesses closing after violence

escalated across the city. Protesters and police battled through the night at

university campuses and other locations only hours after police

Senior Superintendent Kwong Wing-cheung said the Chinese-ruled

city had been pushed to the "brink of a total breakdown".

The former British colony has been rocked by nearly five

months of protest against Chinese rule, and there is growing

concern that the chances of a crackdown by Beijing are rising.

Chinese shares .CSI300 fell 0.18%, while Japanese shares

.N225 fell 0.76%.

In currencies, the dollar was little changed at 109.09 yen

JPY=EBS , pulling away slightly from a five-month high reached

no Nov. 7.

The New Zealand dollar NZD=D3 surged by more than 1% to

$0.6402 after the Reserve Bank of New Zealand unexpectedly left

interest rates on hold at 1%. The yield on benchmark 10-year Treasury notes US10YT=RR

rose slightly to 1.9260% but is likely to move in a narrow range

before data due later Wednesday that is forecast to show U.S.

consumer prices accelerated slightly in October.

U.S. crude CLc1 dipped 0.25% to $56.66 a barrel, while

Brent crude LCOc1 fell 0.35% to $61.84 per barrel on worries

about weakening demand for oil.

Hong Kong stocks have suffered during protests https://tmsnrt.rs/2MJbLuj

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(Editing by Sam Holmes and Jacqueline Wong)

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