Asian stocks follow Europe down, as fears grow over global economy

November 23, 2018: Fresh fears over headwinds facing the global economy saw Asian stocks follow Europe into the red Friday, in light holiday trading after US markets were closed for Thanksgiving.

Investors brushed aside claims from Donald Trump he was hopeful of resolving the bitter trade dispute between the US and China, with the American president set to meet his Chinese counterpart Xi Jinping at the G20 in Argentina next week.

“China wants to make a deal. If we can make a deal, we will,” Trump said, adding he was “very prepared” for the meeting.

But the fractious recent APEC summit — which for the first time ever failed to issue a joint statement after US-China trade tensions boiled over — has set an ominous tone for the high-stakes summit in Buenos Aires.

The world's top two economies have been locked in a trade war for months, with the US imposing punitive tariffs on Chinese goods worth $250 billion per year. In retaliation, China imposed tariffs on $110 billion of US goods.

Washington has threatened to toughen measures even further if the issue is not resolved before January.

Speculation is growing that the People's Bank of China will again cut the level of cash that banks must hold in reserve, in a fresh bid to lower financing costs and blunt the economic impact of the trade dispute with the US.

“The (Chinese) central bank is worried about external shocks in the wake of the cantankerous APEC summit which highlighted a considerable political divide,” said Stephen Innes, head of Asia-Pacific trade at trading group Oanda.

“But moves are unlikely to be substantial given the local markets are effectively in holiday mode.”

(APP)

Posted on: 2018-11-23T10:03:00+05:00

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