Asia stocks mixed as investors parse details of US-China trade deal

TOKYO – Stocks in Asia saw a muted start to Thursday (Jan 16) trading as investors parsed details of the United States-China phase one trade deal.

Shares in Japan and South Korea opened flat, while Australian equities were modestly higher. Hong Kong and Shanghai saw a muted open.

Tokyo’s Topix index added less than 0.1 per cent while Seoul’s Kospi index was little changed. Sydney’s S&P/ASX 200 Index advanced 0.6 per cent. The Shanghai Composite index was flat while the Hang Seng index dipped 0.2 per cent.

In line with regional markets, Singapore shares opened cautiously. The Straits Times Index was up 4.55 points or 0.14 per cent to 3,261.53 at 9.05am.

Futures on the S&P 500 Index edged up 0.1 per cent as of 9.02am in Tokyo. The S&P 500 Index edged up 0.2 per cent to a fresh record high on Wednesday as investors took solace from an easing of tensions between the world’s two largest economies, though ended the session off its high.

Soybeans slumped overnight after China signalled purchases would be demand-based.

The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities. It also binds Beijing to avoid currency manipulation to gain an advantage and includes an enforcement system to ensure promises are kept.

“Given the amount of speculation by the markets and commentary by officials ahead of Wednesday’s signing, it is unsurprising markets have not rallied too strongly upon final signing,” said Ms Hannah Anderson, a strategist at JPMorgan Asset Management. “Markets will likely continue to price in an elevated risk premium, which could be a source of volatility throughout 2020.”

Elsewhere, Russia’s ruble fluctuated. President Vladimir Putin replaced his long-serving prime minister and called for sweeping constitutional changes, fuelling speculation that the Russian leader is moving to extend his grip on power beyond the end of his term in 2024.

Oil drifted, with West Texas Intermediate crude oil adding 0.5 per cent to US$58.11 a barrel.

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