Asia stocks mixed as investors watch for US-China trade updates

Stocks in Asia traded mixed on Monday morning as investors look for further developments on U.S.-China trade.

Mainland Chinese stocks slipped in early trade, with the Shanghai composite down 0.11% and the Shenzhen composite shedding 0.122%.

Hong Kong’s Hang Seng index rose 0.78% in early trade, as shares of Chinese tech juggernaut Tencent advanced 1.38%.

The moves came amid ongoing turmoil in Hong Kong, as the embattled city continues to be rocked by civil unrest that has now lasted for months. Hong Kong police warned Monday live bullets could be fired, as tensions escalate in a standoff with protesters, Reuters reported.

“One should divorce the markets issue, to an extent, from the political issue,” Hugh Young, managing director of the Asia Pacific region at Aberdeen Standard Investments, told CNBC’s “Street Signs” on Monday.

“The stocks listed there represent a lot more than Hong Kong itself,” Young said.

Elsewhere, Japan’s Nikkei 225 added 0.22% while the Topix index traded fractionally higher. Shares of Z Holdings — formerly known as Yahoo Japan — and Line rose more than 1.5% and 2%, respectively, after Reuters reported that the two companies formally announced a merger.

South Korea’s Kospi slipped 0.33%. Shares in Australia also edged lower, with the S&P/ASX 200 down 0.52% as most of the sectors slipped.

Overall, the MSCI Asia ex-Japan index traded 0.11% higher.

Investors will continue to monitor developments on U.S.-China trade. Chinese Vice Premier Liu He had a phone call Saturday morning with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer regarding a “phase-one” trade deal, Chinese state media outlet Xinhua reported over the weekend.

The two sides had “constructive discussions” about “each other’s core concerns” and agreed to remain in close contact, Xinhua reported. The call came at the request of Mnuchin and Lighthizer, according to Xinhua.

That came after White House economic advisor Larry Kudlow said late last week the two economic powerhouses were “getting close” to a deal.

“US‑China trade and technology negotiations will remain front of mind this week. So far, a ‘phase one’ trade deal remains elusive. Despite positive comments from US officials, the US and China appear unable to agree on core components of the deal,” strategists at Commonwealth Bank of Australia wrote in a note.

“In our view, there is a risk that some of the recent optimism around tariffs begins to recede,” the strategists said. “The US is still scheduled to lift tariffs by 15% on US$156 (billion) of Chinese imports on 15 December. Removal of existing tariffs appears to be one of the key sticking points in current negotiations.”

Singapore’s exports for October declined more than expected, Reuters reported Monday citing official data. Non-oil domestic exports dropped 12.3% year-on-year, against expectations of a 10.4% decline in a Reuters poll.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.951 after seeing highs above 98.4 last week.

The Japanese yen traded at 108.80 per dollar after seeing highs below 108.4 in the previous trading week. The Australian dollar changed hands at $0.6811 after declining from highs above $0.684 last week.

What’s on tap:

  • Hong Kong: Unemployment data (August-October) at 4:30 p.m. HK/SIN

— CNBC’s Fred Imbert and Spencer Kimball contributed to this report.

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