The ongoing trade wars between the United States and China have had adverse effects on businesses in both countries. The stock markets have also been affected across the board as the two nations struggle to find common ground.
Asian stock markets experienced a general slump on Monday as investors wait for the results of the US-China negotiations which are scheduled for this week. The two countries are due to meet in Beijing and stakeholders are not holding their breath for a major breakthrough in the negotiations. The countries’ governments have failed to find solutions for a while now and there are no expectations that the negotiations in Beijing will provide the breakthrough needed by concerned parties.
CFD trading has been affected by the trade wars and this can be seen through the number of stocks which slipped on Asian markets on Monday. The Shanghai Composite dropped 0.12% to 2,941.01 and the Shenzhen component and Shenzhen composite traded slightly higher at 9,354.28 and 1,574.95 respectively.
The Hang Seng Index dropped by 1.16% following clashes between the police and protestors in Hong Kong over the weekend. AIA, a life insurer, also saw its shares slip by 2.02%.
Richard Harris, a Chief Executive at Port Shelter Investment Management said that Hong Kong’s business is suffering from the situation in the city. He added that this might help Singapore and the banks as it is easy to move money from one jurisdiction to the other.
In South Korea, the Kopsi slipped by 1.78% and at the close of trading, the stock was sitting at 2,029.48. This figure is lower than the stock’s final close of 2018. Chipmaker SK Hynix also saw their shares drop by 3.51%.
Japanese companies were not spared from the market slump as Nikkei 225 stock fell by 0.91% to close at 21,616.80. Robot maker Fanuc, saw its stock fall by 1.63% despite being one of the index heavyweights. The Topix also declined by 0.91% to close trading at 1,568.57. Investors will be waiting to hear what transpires between the United States and China before they buy stocks again.
U.S-China Trade Wars and Upcoming Negotiations
A trade delegation from Washington is expected to make way to Beijing for the resumption of negotiations pertaining to the ongoing trade wars between China and the United States. The trade wars have resulted in the decline of profits for businesses which operate between the two countries and the disagreements have also affected the general business environment in Asia. Online brokers will be keen for the negotiations to produce a positive result which will boost their business.
Tapas Strickland, an economist at the National Australia Bank, says that the slowdown in profits lines up with the soft producer prices seen earlier in the month and this also suggests that margins are being affected by the US-China trade war.
China’s National Bureau of Statistics reports that Chinese Industrial profits fell as of June. The profits fell 3.1% in June from a year earlier and this fall came after a 1.1% gain in May. This is one such sign of the impact of the trade wars and these slips are expected to continue given that the two governments are unlikely to come to an agreement anytime soon.