Asian shares pause after 5-day rally

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    TOKYO/SYDNEY- Asian stocks barely moved on Thursday as soft US retail sales data raised fears about the health of the world’s largest economy, sucking the steam out of a five-session rally, while hopes of a Brexit deal kept sterling volatile.

    South Korean, Australian and New Zealand indexes were all in negative territory. Chinese shares were mostly flat while Japan’s Nikkei ticked up and US stock futures were barely changed.

    That left MSCI’s broadest index of Asia-Pacific shares outside Japan slightly higher with gains largely led by Hong Kong’s Hang Seng index.

    The S&P 500 shed 0.20 percent on Wednesday after data showed US retail sales contracted in September for the first time in seven months, in a potential sign that manufacturing-led weakness could be spreading to the broader economy.

    “It looks like the trade war has claimed yet another victim, in addition to diminished business confidence and reduced investment spending, as consumers are starting to chicken out,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

    Given US consumption has been one of few remaining bright spots in the global economy, the data fanned worries the Sino-US trade war would tip the world into recession.

    US Treasury Secretary Steven Mnuchin said on Wednesday that US and Chinese trade negotiators were working on nailing down a Phase 1 trade deal text for their presidents to sign next month. (Full Story)

    But he also said there were no plans for another high-level meeting on the trade deal outlined last week.

    “While the US suspended a hike in tariffs, it hasn’t gone as far as scrapping the tariffs altogether, so it is hard to expect a quick pick-up in the economy,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

    Losses in equities were somewhat offset by a solid start to the earnings season, though that is partly because investors have already marked down their expectations substantially.

    Earnings for S&P 500 companies are forecast to show a decline of 3 percent for the quarter, according to Refinitiv data. – Reuters