TOKYO: Global stock markets were mixed on Monday as investors cautiously awaited the outcome of trade talks between the U.S. and China.
Shares in Asia closed mostly lower and Wall Street appeared headed for a drop on the open.
U.S. futures pointed to early losses with the contract for the Dow Jones industrial average down 0.2% to 26,482. S&P 500 futures also lost 0.2% to 2,946.
Shares in Europe were up slightly, with France’s CAC 40 up 0.4% at 5,510, while Germany’s DAX gaining 0.5% to 12,069. Britain’s FTSE 100 picked up 0.3% to 7,178.
All eyes are on the world’s two largest economies as they prepare to resume trade talks this week. Markets have been quick to swing on any hint of movement in the U.S.-China trade dispute, which has dragged on manufacturing around the world, including Asia, and pushed CEOs to delay investments amid uncertainty.
Chinese offices were closed for a holiday, and officials did not respond to requests for comment on a report by Bloomberg that Chinese negotiators were seeking to limit the scope of the talks. That could reduce the likelihood of progress.
In Asian trading, Japan’s benchmark Nikkei 225 shed 0.2% to finish at 21,375.25 while Australia’s S&P/ASX 200 rose 0.7% to 6,563.60. South Korea’s Kospi was little changed, inching up less than 0.1% to 2,021.73. The Sensex in India picked up 0.4% to 37,816.91. Chinese markets are due to reopen on Tuesday after a weeklong break.
CHINA’S RESERVES: China’s foreign currency reserves declined more than expected, prompting suggestions Beijing might have bought yuan to support the Chinese currency’s exchange rate ahead of trade talks with Washington. The reserves, the world’s biggest, fell by $14.8 billion to just under $3.1 trillion in September. The yuan was allowed to tumble to an 11-year low against the dollar in August but has stabilized since then. Washington claims Beijing depresses its exchange rate to make Chinese exports less expensive abroad, hurting foreign competitors. If Beijing is selling foreign currency, then the yuan’s stability might reflect “intervention following the resumption of U.S.-China trade talks,” said Martin Lynge Rasmussen of Capital Economics in a report.
ENERGY: Benchmark U.S. crude added 64 cents to $53.45 a barrel. It rose 36 cents to settle at $52.81 per barrel Friday. Brent crude, the international standard, rose 55 cents to $58.92 per barrel.
CURRENCIES: The dollar edged up to 106.84 Japanese yen from 106.77 yen Friday. The euro rose to $1.0983 from $1.0979.