HONG KONG: Asian markets retreated Tuesday as investors awaited fresh developments in the China-US trade talks, while Beijing lowered its growth forecasts for this year and unveiled massive tax cuts to support the stuttering Chinese economy.
Equity investors tracked losses on Wall Street, where the global rally hit a bump as optimism that the world’s top two economies are heading for a tariffs deal was replaced by a need for clarity on any agreement, reports AFP.Shares have enjoyed a blockbuster start to the year so far but OANDA senior market analyst Alfonso Esparza, said: “Trade optimism could only take the stock market so far.
“High level talks between the two largest economies have been ongoing and although they appear close to bearing fruit, the fact remains that the optimism has already been priced in. Details on the agreement will be needed to unlock gains.”
In early trade, Shanghai was down 0.2 percent while Hong Kong slipped 0.6 percent and Tokyo headed into the break 0.6 percent lower.
Sydney eased 0.5 percent, Singapore was 0.4 percent off and Seoul gave up 0.7 percent with Taipei, Jakarta and Wellington also lower.
There was little major response early on from news that China had lowered its growth target for this year to 6.0-6.5 percent, while announcing hundreds of billions of dollars worth of tax cuts for firms to stimulate the economy.
Beijing will also increase spending, with the targeted fiscal deficit set to increase to 2.8 percent of GDP, from 2.6 percent last year, while the National People’s Congress is expected to pass laws next week regulating foreign investment, in a move that could help ease US trade tensions.The growth figure is below the 6.6 percent achieved in 2018 — which was the slowest for three decades — and comes as the leadership struggles to address a mounting debt crisis as well as the trade row.