SYDNEY (BLOOMBERG) Asian stocks posted modest losses on Friday (Feb 22) following a weak US session as investors mulled an uncertain economic backdrop and mixed signals on trade negotiations. Treasury yields pared Thursday's gains.
Shares in Japan, Hong Kong and Korea retreated and Australian equities edged higher after weaker than expected data from Europe and the US reignited worries about the world economy. US durable goods orders were below expectations and home sales missed estimates. The dollar held an overnight gain amid reports signalling uneven progress in US-China trade talks as next week's deadline for more tariffs nears. The Aussie recouped some losses after the nation's Treasurer said China had not banned its imports.
The weakness in equities comes after the MSCI's global gauge of stocks surged 15 per cent in less than two months on optimism over a US-China trade agreement. President Donald Trump plans to meet with China's top trade negotiator on Friday afternoon as the US tries to forge a preliminary deal with its biggest economic rival, two people familiar with the matter said.
Despite increasing confidence a deal can be done, investors shouldn't expect the stellar run for risk assets to continue at this pace, said Richard Turnill, global chief investment strategist at BlackRock.
"Don't chase the rally," Mr Turnill told Bloomberg TV. "Don't extrapolate the double-digit gains we've seen in the first six weeks of this year."
Also in focus on Friday is a speech from European Central Bank president Mario Draghi. Elsewhere, West Texas oil fell below US$57 a barrel after an industry report showed American crude stockpiles continue to swell.
And these are the main moves in markets:
The MSCI Asia Pacific Index fell 0.4 percent at 11.01 am Tokyo time.
Japan's Topix index fell 0.5 per cent.
Kospi Index fell 0.5 per cent.
Hang Seng Index fell 0.6 per cent.
S&P 500 futures were little changed. The S&P 500 Index dropped 0.4 per cent.
Australia's S&P/ASX 200 Index rose 0.4 per cent.
The yen was steady at 110.71 per dollar.
The offshore yuan slipped 0.1 per cent to 6.7278 per dollar.
The Bloomberg Dollar Spot Index rose 0.1 per cent.
The euro was steady at US$1.1333.
The British pound slipped 0.1 per cent to US$1.3035.
The yield on 10-year Treasuries fell one basis point to 2.68 per cent.
West Texas Intermediate crude fell 0.2 per cent to US$56.84 a barrel.
Gold rose 0.1 per cent to US$1,325.26.