Asian stock markets struggled to extend a relief rally on Thursday, with U.S. futures pointing lower as markets grappled with mixed signals on tariff developments between the U.S. and China.
The Trump administration is considering slashing steep tariffs on Chinese imports—in some cases by more than half—in a bid to de-escalate tensions with Beijing, The Wall Street Journal reported on Wednesday. However, one administration official said Trump wouldn’t act unilaterally and would need to see some action from Beijing to lower tariffs.
China, for its part, signaled that it’s open to trade talks, but there are no ongoing trade negotiations between the U.S. and China as of yet, according to a Chinese commerce ministry spokesperson Thursday. The ministry urged the U.S. to eliminate all unilateral tariff measures.
Hong Kong’s Hang Seng Index was last 1.1% lower, following three consecutive sessions of gains, while China’s Shanghai Composite Index ended flat.
Meanwhile, Japan’s Nikkei Stock Average rose 0.5%, and Australia’s S&P/ASX 200 advanced 0.6%. South Korea’s Kospi was 0.2% lower amid the earnings season and after data showed an unexpected contraction in the economy for the first quarter.
“Optimism is too fragile to call the end of the equity selloff,” given conflicting comments from the Trump administration, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note.
Investors are still cautious and waiting for more certainty in tariff developments, as the more “moderate rhetoric” from two of the world’s biggest economies doesn’t mean that they have found a resolution to the trade war, Linh Tran, market analyst at XS.com, said in commentary.
Some support for markets came from the shift in tone from Trump, possibly scaling back China tariffs despite the lack of specifics, Sucden Financial said in a note. Trump’s comments that he has no plans to dismiss Federal Reserve Chairman Jerome Powell have also helped market sentiment, Sucden Financial said.
Gold is trading around $3,335 a troy ounce, much lower than its record high of over $3,500 a troy ounce on Tuesday, as prospects of easing U.S.-China tensions undermined the safe-haven appeal of the precious metal.
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