Dubai: Global markets were largely muted on Thursday, scaling back from prior-day advances, as investor turned cautious after conflicting comments from US President Donald Trump on the current state of progress in trade negotiations between the top two economies.
Stocks rose on Wednesday after a Bloomberg report re-ignited hopes of China and the United States striking an imminent preliminary deal to end their protracted trade tiff that has dented world economic growth.
However, US President Donald Trump’s remarks that the talks were going “very well” restrained investors from making further risky bets after he had said the day before that it might take until late 2020 to reach a consensus.
Trump’s trade comments on a trade deal not arriving until after next year’s Presidential election appears to be referring to a comprehensive agreement, as overnight reports suggested that talks on an interim trade deal with China were on the “home straight”, said Jeffrey Halley, a senior market analyst at brokerage Oanda.
The pan-European STOXX 600 was up 0.1 per cent, with the trade-sensitive German blue-chip index little changed. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3 per cent.
“Going forward, investors will remain cautious due to uncertainty over the trade deal talks ahead of the upcoming holiday season, which might lead to consolidation with the global equity markets,” said Iyad Abu Hweij, Managing Director at Allied Investment Partners PJSC.
Investors also shrugged off an ADP survey showing US private-sector job growth unexpectedly slowed to its weakest pace in six months in November as goods producers and construction companies cut jobs. The ADP report is not much linked with the closely-watched payrolls data compiled by the US Labor Department, to be released on Friday and expected to indicate how well the US economy is holding up amid a global slowdown.
Investors are awaiting a December 15 deadline when tariffs on another $156 billion in Chinese goods would go into effect. This is widely seen as a pivot point for the stock markets and economists have viewed these tariffs as potentially the most damaging, since they directly target consumer goods.
“If tariffs scheduled for Dec. 15 are implemented it would be a huge shock to the market consensus,” said Sue Trinh, MD for global macro strategy at Manulife Investment Management in Hong Kong. “Trump would be the Grinch that stole Christmas.”
It will be “definitely risk-off across the screen,” said Tongli Han, Chief Investment Officer at Deepblue Global Investment.