Arizona Tribune - Asian markets stutter with focus on China as Trump picks team

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Asian markets stutter with focus on China as Trump picks team
Asian markets stutter with focus on China as Trump picks team / Photo: STR - AFP

Asian markets stutter with focus on China as Trump picks team

Traders struggled Tuesday to bounce back from the previous day's losses in most markets sparked by disappointment over China's economic support measures, while keeping tabs on the United States as president-elect Donald Trump builds his cabinet.

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The tepid start to the day came despite another record close on Wall Street, fuelled by expectations that Trump will push through promised business-friendly policies and hopes that his administration will be pro-crypto, which saw bitcoin push to a new record close to $90,000.

While US investors are gearing up for another strong four years as Trump cuts taxes and eases regulations, their Asian counterparts -- particularly in China -- are keeping a wary eye on developments amid fears of another debilitating trade war.

Beijing's failure to announce any new stimulus at Friday's much-anticipated news conference has dampened sentiment on trading floors this week, taking the wind out of investors' sails after a raft of measures unveiled at the end of September fuelled a market rally.

However, some observers said the decision may have been down to Chinese officials keeping their powder dry in order to react to the impacts caused by any Trump measures, such as tariffs.

Asian markets mostly fell in early exchanges with Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Manila all lower, while Tokyo and Wellington edged up.

The dollar extended gains against its peers that started after news of Trump's election, which has sparked bets on a pick-up in inflation that could complicate the Federal Reserve's plans to lower interest rates.

US consumer price index data due Wednesday will be closely watched as investors try to ascertain the bank's plans for next month's monetary policy meeting.

"We assume the Trump administration will deliver on their key policy proposals with the degree and timing of these policies the bigger uncertainty," said National Australia Bank's Rodrigo Catril.

"Most of these policies (lower taxes, tariffs, immigration, deregulation, unfunded expansionary fiscal policy) can be regarded as pro- growth and or inflationary.

"This means, all else equal, a shallower Fed easing cycle and a stronger dollar."

With Trump due to return to the White House in just over two months' time, a big question on investors' minds is when he will embark on his trade agenda.

"Wall Street is tentatively banking on a late 2025 or early 2026 timeline, allowing his team time to attempt diplomacy before reaching for the tariff stick," Stephen Innes, managing partner of SPI Asset Management, said.

"But word on the street hints that Trump could fast-track his tariff push, possibly leaning on current trade data from China to justify earlier action. And with China’s trade surplus on track to hit record highs this year, that showdown may not be too far off."

In the crypto sphere, bitcoin hit a peak just above $89,599, putting it well within range of the key $100,000 marker.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.5 percent at 39,748.13 (break)

Hong Kong - Hang Seng Index: DOWN 0.5 percent at 20,330.82

Shanghai - Composite: DOWN 0.1 percent at 3,467.69

Dollar/yen: UP at 154.00 yen from 153.81 yen on Monday

Euro/dollar: DOWN at $1.0645 from $1.0648

Pound/dollar: DOWN at $1.2855 from $1.2872

Euro/pound: UP at 82.80 pence from 82.73 pence

West Texas Intermediate: UP 0.2 percent at $68.19 per barrel

Brent North Sea Crude: UP 0.2 percent at $71.96 per barrel

New York - Dow: UP 0.7 percent at 44,293.13 (close)

London - FTSE 100: UP 0.7 percent at 8,125.19 (close)

K.Hill--AT