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GLOBAL MARKETS-Asian shares soft as trade doubts creep back in

Published 19/11/2019, 11:15 am
© Reuters.  GLOBAL MARKETS-Asian shares soft as trade doubts creep back in
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* Markets on edge, await signs of Sino-U.S. trade breakthrough

* Japan's Nikkei, Australian shares head lower

* Currencies becalmed, awaiting concrete news

By Tom Westbrook

SINGAPORE, Nov 19 (Reuters) - Asian shares started Tuesday softer as another day awaiting clearer news on the progress of U.S-China trade negotiations weighed on jaded investors' sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.1%.

Japan's Nikkei .N225 was 0.2% lower in early trade. Australia's S&P/ASX 200 index .AXJO was flat and trading volumes were light. E-Mini futures for the S&P 500 ESc1 fell 0.05%, although that followed another record-high close on Wall St on Monday. .N

Overnight, CNBC reported the mood in Beijing was pessimistic about the prospects of sealing an agreement.

On the other hand, a new extension allowing U.S. companies to continue doing business with Chinese telecoms giant Huawei Technologies Co Ltd HWT.UL suggested something of an olive branch, though neither morsel shed much light on progress in negotiations.

"We're still waiting," said Michael McCarthy, chief market strategist at brokerage CMC Markets in Sydney.

"The longer we go on, the more concerns will arise. The reality is the clock is ticking...increasing uncertainty is adding to investor nervousness."

The next deadline in the dispute - which has harmed global growth - is Dec. 15, when another round of U.S. tariffs on Chinese good is scheduled to take effect.

Optimism that an agreement could be struck before then is still holding, but it is beginning to run out of puff.

Wall Street's main indexes were mostly flat, looking for direction on trade, though they ended the day inching higher to record high closing levels.

The Dow Jones Industrial Average .DJI rose 31.33 points, or 0.1%, to 28,036.22. The S&P 500 .SPX gained 1.57 points, or 0.05%, to 3,122.03 and the Nasdaq Composite . IXIC added 9.11 points, or 0.1%, to 8,549.94.

The pan-European STOXX 600 index .STOXX closed down 0.01%, while the FTSEurofirst 300 index .FTEU3 of leading regional shares fell 0.04%.

The yield on benchmark 10-year Treasury notes US10YT=RR fell overnight and steadied at 1.8152% in Asia.

WAITING GAME

Currency markets were becalmed and trading was light. Uncertainty on the trade front dented the dollar a little bit overnight, though most currencies kept to tight ranges awaiting more concrete news.

The greenback was steady against the Japanese yen JPY= in early trade at 108.67 yen and a touch stronger against the Australian and New Zealand dollars at $0.6805 AUD= and $0.6394 NZD= respectively.

The biggest mover overnight was the British pound GBP= which headed towards $1.30 as four polls showed Prime Minister Boris Johnson's Conservative Party tracking toward victory at the Dec. 12 election.

Sterling hit a one-month high of $1.2984 overnight, before retreating a little in early Asian trade to settle around $1.2950.

Market attention will be focused on the release of minutes from the Reserve Bank of Australia's November meeting at 0030 GMT, which will be scoured for signals as to whether the central bank will cut rates below an already record low 0.75%.

"The minutes are likely to show that the board members are wary of the downside of lowering interest rates further," said Joe Capurso, FX analyst at Commonwealth Bank in Sydney.

"If you get that issue pop up again in the minutes, the Aussie could rise...It'd make the hurdle for a rate cut higher."

Spot gold XAU= , which has been closely tracking the fortunes of the Sino-U.S. trade dispute was flat at $1,470.30 per ounce.

Brent crude LCOc1 futures fell 1.6% to $62.29 a barrel while U.S. West Texas Intermediate (WTI) crude CLc1 lost 0.23% to $56.92 per barrel.

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