A man walks past an electronics stock indicator displaying the closing rate of Tokyo Stock Exchange in Tokyo yesterday. Tokyo stocks closed lower, ending a seven-day winning streak, as a higher yen against the dollar weighed on the market and investors sought to lock in profits. Image Credit: AFP

Dubai: Global markets gave up most of their gains from Monday as investors seemed to second-guess the likelihood of a trade deal between China and the US.

US markets were set to open lower while Asian and European shares scrambled to get confirmation on the truce reached during the G-20 meeting in Argentina, where US President Donald Trump seemed to reach an accord with Chinese premiere Xi Jinping. The US has agreed to 90-day moratorium on threats to raise tariffs on more than $200 billion (Dh734.5 billion) in annual imports from 10 per cent to 25 per cent; however Chinese and US officials suggested that it’s a long way to go before any de-escalation begin.

Trump tweeted that China has agreed to reduce and remove tariffs on cars coming into China from the US. However, neither Treasury Secretary Steven Mnuchin nor Trump’s top economic adviser Larry Kudlow were able to confirm the news.

“The bullish spirits faded so quickly amid rising doubts and conflicting messages received from top officials in the Trump Administration,” Hussain Sayed, Chief Market Strategist at FXTM, said. “Such inconsistent messages will leave markets guessing and struggling to reach a conclusion, thus leading to volatile price action in financial assets.”

The Dow Jones Industrial Average futures was down 0.41 per cent at 25,739. The S&P 500 futures 0.30 per cent lower at 2,782.50. The DJIA and the S&P 500 index had gained more than a per cent in the previous session.

European and Asian equities also traded lower. The STOXX Europe 600 Index was 0.51 per cent lower at 359.32. The Asia Dow Index USD closed 0.48 per cent lower at 3,279.62.

“The initial relief rally was never going to last, investors need more detail now in order for that risk on sentiment to survive. So far that detail has not been coming through and investors have more questions than answers. Once again, we find ourselves on that familiar territory of trading sentiment fluctuations stemming from trade war headlines,” Jasper Lawler, Head of Research at London Capital Group, said.

Worries about a trade war, that was seen impeding growth, had been weighing on traders sentiment, and that trimmed gains to 4.48 per cent on the DJIA so far in the year after rising as much as 27,000.

Techically, the US indices are at a risk.

“The risks are skewed to the downside for equities — especially given the developing technical developments on the indices, with the Dow and S&P both currently showing shooting star candlestick pattern on their respective daily charts,” Fawad Razaqzada, Market Analyst, Forex.com said.