Asians Stocks Volatile on Sluggish Global Growth

Asian shares fluctuated in cautious trading on Thursday with China extending losses as investors were concerned about the sluggish global growth in the face of increasing US interest rates and trade frictions.

US stock futures were slightly higher after briefly turning down, underscoring fragile investor sentiment after a rout in October and sharp selloffs in recent sessions. Spread-betters indicated a tentative start for Europe.

MSCI’s broadest index of Asia-Pacific shares excluding Japan was last up 0.2 percent, recouping earlier losses. The index has managed to endure so far in November after three straight monthly declines, but it’s on its way for the worst annual performance since 2011.

Japan’s Nikkei was off morning highs but higher 0.7 percent. Chinese shares were in the negative territory after opening higher, with the blue-chip index slipping 0.4 percent.

“This was a half-hearted rally to start with,” said Shane Oliver, who is the Sydney-based head of investment strategy at AMP. “Investors are still wary about whether they’ll see further lows given none of the issues that drove the recent correction have dissipated.”

The bitter US-China trade war is still the biggest concern for markets, with signs of weakening corporate profits, a sharp sell-off in tech stocks and rising US interest rates encouraging investors to take money off the table before year-end. “And that’s all tying in to worries about the global economy.”

Singapore warned earlier on Thursday that trade frictions will likely hurt economic growth in the city state, widely seen as a bellwether for international trade and investment.

E-minis for the S&P 500 were higher 0.2 percent while FTSE futures were mostly flat and spread-betters indicated a subdued start for Germany.

Overnight in Wall Street, the benchmark S&P 500 stock index finished higher but near session lows while the Dow gave up its gains to end flat ahead of the US Thanksgiving holiday in a sign of lingering bearishness.

Investors are focused on a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping later this month for any signs of an easing in the trade war between the world’s two largest economic powers.

Trump and Xi are set to meet on the sidelines of a G20 summit, which is being held in Argentina at the end of November and early December.

The United States and China have slapped import tariffs on each other’s goods in a tit-for-tat tariff war that investors worry could put the brakes on global trade and growth.

Chinese investors are not optimistic about any progress at the Trump-Xi talks, but are leaving room for surprises.

“Mr. Trump is unpredictable,” said Lin Liu, who is a professional investor in Shanghai. “You never know when he’ll do an about-face.”

Even a breakthrough on trade would only remove some of the pressure on China’s sluggish economy, which is facing a slowdown in domestic consumption.

Markets will also center on manufacturing activity reports from Japan, Europe, and the United States due in the coming weeks.

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