Asian Pacific markets ended on a mixed status on Friday last week as investors are awaiting the eagerly hyped meeting between Chinese leader Xi Jinping and President Donald Trump for the G-20 summit poised to take place in Argentina.
Indeed, many investors from both camps are hoping that the meeting will help reduce trade tensions between both countries.
While focusing on the Asian markets, South Korea’s Kospi dropped by 17.24 points, and Japan’s Nikkei 225 increased by 88.46 points.
That being said, the Bank of Korea increased its interest rate on policy last week on Friday. This is the first time it has done so in over a year. Nevertheless, the move was widely anticipated.
Dealing with the Tough Economic Times
With this in mind, analysts have mentioned that despite a slowdown in terms of certain economic features, the central market opted to raise the rates primarily due to the risk of a fiscal imbalance.
Indeed, an analyst at Citi Research comments on the current situation, stating that the recent increase is similar to the one that was made in August of 2008, which would most likely complete the normalization process and provide greater policy space while predicting the next potential downturn.
Moreover, the analyst predicts that the potential negative impact from the tensions in trade could cause a showdown with the Chinese economy and could damage Korea’s supply chain linkage when attached with China.
That being said, investments will likely be affected as a result of a greater rate of unemployment.
Moreover, the Korean won managed to trade at 1,121.05 in comparison to the dollar.
Hong Kong and Shanghai Increase Their Status
That being said, China’s greater markets completed the day much higher. For starters, the Shanghai composite managed to bag 20.74 points, to get to 2,588.18.
On the other hand, the Shenzhen composite increased by 12.31 points, to close at 1,337.74 points. Additionally, Hong Kong’s Hang Seng index increased by 0.4 percent.
Nevertheless, when it came to the manufacturing sector, China’s growth stalled for the first time in over 2 years as the country experienced a reduction in the number of orders.
Additionally, the release of the Purchasing Manager’s Index on Friday recorded a reduction and landed at 50, which was lower than the 50.2 that was recorded in October.
That being said, when it came to Australia, the ASX 200 recorded a drop of 91.20 points, with a majority of its sectors recording a massive decline.
Moreover, the weighted financial subindex dropped by 1.58 percent as a majority of banking stocks nose-dived as a result of the 0.69 percent drop recorded by the material sector
The session in Asia was then followed by a lesser finish on Wall Street, where the Dow Jones industrial average managed a winning streak of 3 days.
Highly Anticipated Meeting in Buenos Aires
Indeed, on Thursday last week, President Trump informed reporters that he was on the verge of doing something in relation to the ongoing trade war with China. That being said, he also said that he wasn’t sure if he would go along with it.
Additionally, he also commented that what he has right now is billions of dollars entering the United States in terms of taxes and tariffs, so he isn’t sure at the current moment.
Nevertheless, reporters were informed that White House advisor Peter Navarro would be part of the guest list poised to attend the dinner between Xi and Trump.
Unfortunately, information of his attendance does not play well, as it killed the hopes that perhaps a trade deal could be struck between the two leaders regarding the current U.S.-China trade.
However, another press source divulged that officials from both parties were analyzing the possibility of a trade pact as well as the reduction of any tariffs, as well as the reduction of other tariffs while handling the Beijing economic policy.
Indeed, analysts have predicted that if there is a conciliatory tone between the two leaders, it could mean that risk assets could be taken with a more positive stride.
Nevertheless, some analysts have warned that the possibility of the trade dispute going away might not take place simply because the two leaders have had a meeting. Individuals will just have to wait and see how it plays out.