Asian markets tumble on US-China talks, Europe growth

Monitoring Desk

HONG KONG: Asian stocks fell sharply Friday following losses on Wall Street as fresh doubts emerged over the prospects for US-China trade talks and Europe’s growth outlook.

Hong Kong returned from the three-day Lunar New Year break and was immediately in the red, as investors reacted to negative signals from the US ahead of next week’s crunch trade negotiations in Beijing.

“Fear raised its ugly head in overnight market action,” said CMC Markets chief strategist Michael McCarthy.

“US investors cited concerns about seemingly stagnant trade negotiations between China and the US, despite a week long holiday in China.”

US President Donald Trump told reporters he did not expect to meet Chinese counterpart Xi Jinping before the March 1 deadline, when US duty rates on many Chinese goods are due to jump.

He previously said a deal to avert rate hikes may depend on him meeting Xi, amid speculation the pair could set aside time when Trump flies to Vietnam to meet North Korea’s Kim Jong Un late this month.

Top White House economist Larry Kudlow further doused expectations by saying Washington and Beijing are a “sizeable distance” apart in talks, adding that no date for a US-China leaders’ summit has been set.

Economists say imposition of the tariffs could further weaken the global economy.

In morning trade, Hong Kong fell 1.2 percent, while Tokyo shed 1.7.

Sydney lost 0.5 percent as Australia’s central bank downgraded its economic outlook.

Shanghai and Taipei remain closed for the week.