Asian Shares Fall as US, China Prepare for Trade Talks

By Investors Hub

Asian stocks fell broadly on Monday as caution set in ahead of U.S.-China trade talks set to resume this week and the U.S. Federal Reserve’s monetary policy announcement due on Wednesday. Upbeat GDP and earnings numbers from the U.S. helped to limit the downside across the region.

China’s Shanghai Composite Index edged down 3.53 points or 0.1 percent to 2,941.01 as data showed profits earned by Chinese industrial firms contracted in June after a brief gain the previous month, adding to fears of a slowdown. Hong Kong’s Hang Seng Index tumbled 291.33 points or 1 percent to 28,106.41.

Industrial profits fell 3.1 percent in June from a year earlier to 601.9 billion yuan ($87.5 billion), according to data released by the National Bureau of Statistics on Saturday.

Japanese shares ended lower as investors adopted a cautious approach ahead of the Bank of Japan’s policy board meeting and the U.S. FOMC meeting. The Nikkei 225 Index ended down 41.35 points or 0.2 percent at 21,616.80, while the broader Topix closed 0.2 percent lower at 1,568.57.

Exporters fell broadly as the yen strengthened against the dollar. Japan Post Holdings Co. declined 1.6 percent. The company reconfirmed that there is no plan to halt the sales of Aflac Japan’s cancer insurance through the Japan Post Group system.

In economic news, the value of retail sales in Japan was roughly unchanged in June on a seasonally adjusted basis, a government report showed. That exceeded expectations for a decline of 0.3 percent following the upwardly revised 0.4 percent gain in May.

Australian shares rose to close near record highs after the S&P 500 and Nasdaq Composite set all-time highs on Friday.

The benchmark S&P/ASX 200 Index rose 32.40 points or 0.5 percent to 6,825.80, just 3 points shy of its best closing level ever. The broader All Ordinaries Index ended up 32.10 points or 0.5 percent at 6,911.40.

Tech stocks followed their U.S. peers higher, with Appen and Afterpay Touch climbing 3-4 percent. WiseTech Global advanced 1.8 percent.

Afterpay Touch said it has appointed an external auditor to conduct an AUSTRAC-ordered review of its compliance with financial crime regulation.

Healthcare stocks such as CSL and Cochlear rose about 1 percent. Mining giant Rio Tinto gained half a percent ahead of its first-half results due later this week.

Shares of infant-formula maker Bubs Australia surged 5.6 percent after the company reported record quarterly revenue.

On the other hand, rare earths producer Lynas Corp dropped 2.3 percent after reporting a decrease in quarterly revenue.

Seoul stocks fell for a fourth day to hit a two-month low amid growing uncertainties, such as a trade row with Japan and the U.S.-China trade war. The benchmark Kospi plunged 36.78 points or 1.8 percent to 2,029.48.

Japan will decide on August 2 whether to remove South Korea from its list of countries that enjoy preferential treatment in trade, potentially affecting some 1,000 industrial items.

Tech heavyweights came under heavy selling pressure as traders locked in profits after a recent rally. Samsung Electronics fell 2.2 percent and SK Hynix lost 3.5 percent.

Samsung Engineering jumped 4.2 percent after saying it is closing in on a deal worth 168.4 billion won (US$142 million) to build refinery facilities in Mexico.