World Markets Mixed After U.S. Shares Forge New Highs

A man walks by an electronic stock board of a securities firm in Tokyo, Wednesday. (AP Photo/Koji Sasahara)

World shares were mixed Wednesday after Wall Street benchmarks set fresh highs, spurred by optimism over trade talks between the U.S. and China.

Investors are awaiting fresh U.S. home sales data, a key measure of inflation, and Washington’s latest quarterly estimate of economic growth.

Britain’s FTSE 100 gained 0.3% to 7,423.42 while the CAC 40 in France edged 0.1% lower to 5,924.05. Germany’s DAX lost less than 0.1% to 13,229.04. Wall Street looked set for a tepid start, with the future contract for the Dow Jones Industrial Average almost unchanged at 28,126.00. The future for the S&P 500 inched 0.1% higher to 3,145.60.

Investors have grown more hopeful over trade negotiations as the world’s two economies keep their rhetoric in check. The latest signals indicating that China and the U.S. are making progress toward a deal on trade have been particularly encouraging, as new U.S. tariffs are set to hit Dec. 15 on many Chinese-made items, including electronics and computers.

Investors hoping that Washington and Beijing can agree on terms of a deal that halts their trade dispute, or at least stops it from escalating.

President Donald Trump said Tuesday that “we’re in the final throes of a very important deal. I guess you could say one of the most important deals in trade ever.”

That followed an announcement by China’s Commerce Ministry that said negotiators for both sides had spoken on the phone and agreed to more talks aimed at reaching a deal. The latest development came a day after China announced new guidelines for the protection of patents and copyrights, which has been a key issue in the dispute.

While most of the news on trade tensions between Washington and Beijing pointed toward progress, the Department of Commerce on Tuesday announced a plan to begin requiring case-by-case approvals of all purchases by telecommunications companies of equipment that might pose a security risk.

The move follows an order by President Donald Trump in May declaring a national emergency as a first step toward barring such deals. Major telecoms gear suppliers like China’s Huawei Technologies and ZTE Corp. would likely be the hardest hit. The Commerce Department proposal could complicate efforts to clinch the trade deal.

The risk is “optimists are getting ahead of themselves on hopes of a U.S.-China trade deal,” Mizuho Bank said in a commentary. “And not merely because the details of a ‘phase-one’ deal may end up disappointing. Instead, the bigger risk is an augmented form of ‘bait and switch’ with regards to U.S.-China trade conflict; where investors seduced by a rapidly progressing ‘phase-one’ trade deal are blindsided by the escalating tech tensions between the U.S. and China.”

In Asian trading, Japan’s Nikkei 225 advanced 0.3% to 23,437.77, while the S&P ASX 200 in Australia climbed 0.9% to 6,850.60. South Korea’s Kospi gained 0.3% to 2,127.85. The Hang Seng in Hong Kong rose 0.2% to 26,954.00. The Shanghai Composite index lost 0.1% to 2,903.19, while India’s Sensex added 0.2% to 40,910.06.

Shares fell in Malaysia but rose in Taiwan and elsewhere in Southeast Asia.

Overnight on Wall Street, the S&P 500 index rose 0.2% to 3,140.52, while the Dow Jones Industrial Average gained 0.2% to 28,121.68. The Nasdaq composite added 0.2% to 8,647.93. The Russell 2000 index of smaller company stocks picked up 0.1% to 1,624.23.

The major stock indexes are on track for strong gains this year. The S&P 500 is up by more than 25%, while the Dow is up by more than 20%. The Nasdaq, meanwhile, is now up by more than 30%.

Surprisingly good corporate earnings, solid economic data, interest-rate cuts by the Federal Reserve and more optimism on the part of investors about the prospects for a U.S.-China trade deal have helped spur the market higher since late October.

In energy trading, benchmark crude oil lost 5 cents to $58.36 per barrel in electronic trading on the New York Mercantile Exchange. It rose 40 cents to settle at $58.41 a barrel. Brent crude oil, the international standard, lost 3 cents to $63.18 per barrel.

The dollar rose to 109.17 Japanese yen from 109.03 yen on Tuesday. The euro slipped to $1.1006 from $1.1021.

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