Asia report: Markets mixed as questions raised over US-China trade truce

Markets in Asia were in a mixed state as they closed on Tuesday, as positivity from the bumper session on Monday began to make way for questions on the trade truce agreed between Donald Trump and Xi Jinping.

In Japan, the Nikkei 225 was down 2.39% at 22,036.05, as the yen strengthened 0.77% against the dollar to last trade at JPY 112.78.

The broader Topix index was off 2.36% at 1,649.20 in Tokyo.

Industrial firms led the benchmark lower, with Kawasaki Kisen Kaisha down 10% and engineering group Showa Denko losing 8.8%.

Carmaker Nissan was down 1.18% after reports that its board was meeting to decide their plan to replace sacked chairman Carlos Ghosn.

Ghosn was let go last month amid reports he had falsified financial returns, with local news in Japan revealing that Tokyo prosecutors were now planning to arrest him following fresh claims that he had intentionally understated his income.

On the mainland, the Shanghai Composite managed gains of 0.42% to 2,665.96, and the smaller, technology-heavy Shenzhen Composite rose 0.43% to 1,387.49.

South Korea’s Kospi slipped 0.82% to 2,114.35, while the Hang Seng Index in Hong Kong rose 0.29% to close at 27,260.44.

Sentiment in the region was muted after a stellar session on Monday, as positivity around an agreed trade war ceasefire between the US and China began to wane.

While both countries said they were going ahead with a 90-day halt on any new or increased tariffs, market watchers noted some differences in the way Beijing and Washington were describing the situation.

National Australia Bank senior foreign exchange strategist Rodrigo Catril noted that the news had likely left the market with more questions than answers, and asked whether the two countries could really resolve their trade differences in three months.

Oil prices were higher, with Brent crude last up 2.1% at $63.01 per barrel and West Texas Intermediate adding 1.93% to $53.99.

In Australia, the S&P/ASX 200 slid 1.01% to settle at 5,713.10, with the hefty financials subindex losing 1.22%.

All of the big four banks were in the red, with Australia and New Zealand Banking Group off 1.35%, Commonwealth Bank of Australia down 1.05%, National Australia Bank losing 0.93%, and Westpac Banking Corporation sliding 1.37%.

Those movements came after the Reserve Bank of Australia satiated market expectations by standing pat on the official cash rate, leaving it at 1.5%.

The central bank’s governor, Philip Lowe, told media that low interest rates were continuing to underpin the country’s economy.

“Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual,” Lowe said.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 ended its five-day winning streak, falling 0.1% to 8,865.76.

Medical equipment manufacturer Fisher & Paykel Healthcare was one of the big losers, sliding 1.9% as the New Zealand dollar strengthened to a five-month high.

F&P Healthcare receives more than half of its revenue in US dollars, in the lucrative American healthcare market.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.35% at AUD 1.3544, and the Kiwi advancing 0.43% to NZD 1.4373.