(Bloomberg) – Asian stocks stumble to the finish line Friday, pairing an otherwise solid week with winnings.
Investor anxiety is again rising as the latest round of trade talks in Beijing seems to unpack without a patch. In a number of meetings this week, the two sides have failed to reduce the gap around the structural reforms of China's economy, and it is likely to meet with President Donald Trump and his counterpart Xi Jinping to seal an agreement, according to the US and China. officials who are familiar with the discussions.
As a result, the MSCI Asia Pacific Index deleted half of its weekly win on Friday, with most markets in the region trading in red as South Korea, Hong Kong and Japan declined. The longer US and Chinese calls are going, the more doubts are left among Asian investors after equities in the region have reached 1
"It is unlikely that China will change the course in three months," Nader Naeimi, head of dynamic markets with AMP Capital Investors Ltd., said in an interview with Bloomberg Television. "As long as there is no clarity and closure, uncertainty will remain and economic data will probably feel pressured."
It is certainly true for both sides, as figures overnight showed that US retail sales fell most unexpectedly in nine years in December, while the last reading for China's factory prices Friday showed a seventh straight month of deceleration. Bloomberg Intelligence economists slashed their growth estimate for the US in 2018 to 3 percent from 3.2 percent after the surprise end result.
Nevertheless, investors have not yet thrown into the towel. Keep in mind that the MSCI Asia Pacific Index is on its way to a fifth weekly prize of six, and its 30-day volatility is at its lowest level since August. The meter has managed to hold over 100-day moving averages since January 25, a decent stretch after repeatedly failing to keep that level in the past year.
"There has been a shift in the first few weeks of 2019 in what investors are pricing in as the best scenario for trade negotiations in the US and China," said Hannah Anderson, global market strategist with JPMorgan (NYSE 🙂 Asset Management, in a note to Clients on Friday Expectations of a comprehensive deal have been scaled down to more modest hopes that the United States will not raise or apply more tariffs, reflecting "how eager markets, exhausted after a year of trading headlines, are moving trade problems to the back burner."
The ongoing earnings season may help divert investors attention. In Asia, HSBC Holdings Plc (LON 🙂 and Hang Seng Bank Ltd. will take center stage next week, while Walmart (NYSE 🙂 Inc. and Hewlett Packard Enterprise Co.'s US Profit  See what's coming next week here.
Stock Market Summary
- MSCI Asia Pacific Index down 0.8%, on a weekly gain of 0.6%  Japan's index down 0.8%; down 1.2%
- Hong Kong is down 1.6%; Hang Seng China Enterprises down 1.8%; down 0.6%; CSI 300 down 0.9%
- Taiwan's Taiex index changed little
- South Korea's Kospi index down 1.5%; Kospi 200 down 1.8%
- Australia is up 0.2%; New Zealand's S & P / NZX 50 down 0.4%
- India's S & P index down 0.3%; NSE Nifty 50 down 0.4%
- Singapore's Straits Times Index down 0.4%; Malaysia's KLCI small changed; Philippine stock market index has changed little; Jakarta Composite down 0.4%; Thailand lowers 0.3%; Vietnam's VN index has changed little
- down 0.3% after the index stopped 0.3% in last session
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