Hong Kong, April 9: Asian markets struggled Tuesday as dealers await the latest developments in the China-US trade talks, while Donald Trump trained his sights on the European Union by threatening tariffs on billions of dollars' worth of goods.

With few major catalysts to fire activity, eyes are on an upcoming EU summit that will decide whether or not to extend the Brexit deadline, a key European Central Bank meeting and the release of minutes from the Federal Reserve's March policy gathering.

Earnings season also kicks off in earnest this week, with expectations low but observers hoping for some positive forward guidance.

Beijing and Washington have flagged progress in trade negotiations, helping global markets push to multi-month highs this year, though there have been few details.

“Global growth concerns are easing as US-China appear to be close to a deal, but without details and with veiled threats if the deal is not (the) best, markets are treading carefully,” said OANDA analyst Alfonso Esparza.

In early trade Hong Kong was down 0.1 percent, having ended above 30,000 points Monday for the first time since June, while Shanghai eased 0.5 percent and Tokyo finished the morning 0.2 percent off.

Seoul and Wellington were also lower, while Sydney and Taipei were flat. Singapore and Jakarta edged up.

Trading was given a knock by news that the US had threatened levies on up to $11.2 billion on a host of European products in response to subsidies received by aircraft maker Airbus as part of a long-running row.

“This case has been in litigation for 14 years, and the time has come for action,” said US Trade Representative Robert Lighthizer.

The move comes as Brussels and Washington are on the verge of a stand-off over the auto sector, while Trump has also warned of action against Japan as part of a multi-pronged trade fight that has shaken investor confidence.

On currency markets the pound continues to stand its ground despite ongoing Brexit uncertainty, with Prime Minister Theresa May holding a series of meetings with EU leaders to win backing for a second delay to Britain's exit from the bloc.

The British premier has appealed for the divorce date to be put back to June 30 and will learn Brussels' decision at a showdown summit Wednesday.

If the request is denied Britain will crash out on Friday, with analysts warning of an economic catastrophe for the country if that happens.

However, even if she gets the extension, May is still struggling to get backing in parliament for the exit deal she agreed with the EU months ago. Adding to the uncertainty is the fact she is also facing a revolt by pro-Brexiters within her Conservative Party over her decision to hold talks with the opposition Labour Party.

Oil prices were barely moved after a recent surge fuelled by increasing unrest in key producer Libya where there is fear of a civil war as it is engulfed in violent power struggles between an array of armed groups since the 2011 overthrow of dictator Moamer Kadhafi.

Both main contracts are around six-month highs, boosted by hopes for the China-US talks, an output cut by OPEC and non-members including Russia, and sanctions on Venezuela and Iran.

“It's very bullish markets when traders not only ignored last week's unexpected US inventory builds but completely sidestepped Friday's Baker Hughes surging rig count,” said Stephen Innes at SPI Asset Management.

“Usually, this bearish combination would have thwarted the ongoing rally.”

– Key figures around 0300 GMT –

• Tokyo – Nikkei 225: DOWN 0.2 percent at 21,722.19 (break)
• Hong Kong – Hang Seng: DOWN 0.1 percent at 30,037.72
• Shanghai – Composite: DOWN 0.5 percent at 3,228.08
• Pound/dollar: UP at $1.3076 from $1.3065 at 2040 GMT on Friday
• Euro/pound: DOWN at 86.15 pence from 86.19 pence
• Euro/dollar: UP at $1.1265 from $1.1261
• Dollar/yen: DOWN at 111.33 yen from 111.49 yen
• Oil – West Texas Intermediate: UP one cent at $64.41 per barrel
• Oil – Brent Crude: DOWN 10 cents at $71.00 per barrel
• New York – Dow: DOWN 0.3 percent at 26,341.02 (close)
• London – FTSE 100: UP 0.1 percent at 7,451.89 (close)

(AFP/APP)

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