Asian shares were mixed Wednesday after record highs on Wall Street amid investor optimism about an interim U.S.-China trade deal announced last week were tempered by fresh worries of a hard Brexit.
Japan’s benchmark Nikkei 225 NIK, -0.45% erased earlier gains to inch down 0.4% in morning trading. Hong Kong’s Hang Seng HSI, -0.03% also gave up early gains and was last down 0.1% while the Shanghai Composite SHCOMP, -0.08% was headed in the same direction. Australia’s S&P/ASX 200 XJO, +0.11% gained 0.2% while South Korea’s Kospi 180721, -0.02% was little changed. Benchmark indexes in Taiwan Y9999, -0.09% , Singapore STI, +0.23% , Malaysia FBMKLCI, +0.25% and Indonesia JAKIDX, +0.05% were mixed.
Among individual stocks, SoftBank 9984, +2.30% and Hitachi 6501, +3.16% gained in Tokyo trading, while Nintendo JP:7974 and shipping giant Mitsui OSK Lines 9104, -2.48% declined. In Hong Kong, oil producer CNOOC 883, +2.32% and tech giant Tencent 700, +0.86% advanced, while casino operator Galaxy Entertainment 27, -1.54% and China Overseas Land & Investment 688, -1.38% fell. Samsung Electronics 005930, -0.18% fell slightly after its chairman was convicted of violating South Korean labor union laws and sentenced to 18 months in jail. Oil Search OSH, +3.42% surged in Australia.
Wall Street extended its milestone-shattering run Tuesday, nudging the major indexes to more record highs.
The S&P 500 SPX, +0.03% had its fifth gain in a row. The benchmark index and the COMP, +0.10% losed at new highs for the fourth straight day. The Dow Jones Industrial Average DJIA, +0.11% also closed at a record high, its second milestone this week.
A Federal Reserve meeting last week also spurred buying after investors saw signals from Chairman Jerome Powell that interest rates will stay low for a while.
“A lot of the strength that we’re seeing is just a continuation of the ‘Phase 1’ U.S.-China deal from last week and some potential clarity around Brexit,” said Jamie Lavin, global investment specialist at J.P. Morgan Private Bank. “But, really, this morning one of the things that’s kept us higher is we did see some stronger economic data.”
The S&P 500 rose 1.07 points, or less than 0.1%, to 3,192.52. With less than three weeks left in 2019, the index is up 27.4% for the year.
The Dow Jones Industrial Average gained 31.27 points, or 0.1%, to 28,267.16. The Nasdaq climbed 9.13 points or 0.1%, to 8,823.36.
“Global economic outlook seems to have improved in November and is going to extend the positive trajectory into early 2020,” said Margaret Yang at CMC Markets.
The U.S. and China agreed last week to cut tariffs on some of each others’ goods and postpone other tariff threats. The interim trade deal has helped ease a key source of uncertainty for investors heading into next year.
The latest batch of economic data also helps buttress traders’ confidence in the health of the U.S. economy. In August, fears that the U.S. was headed for recession roiled markets.
The Fed said Tuesday that industrial production and manufacturing were stronger last month than economists expected, though they are weaker than a year ago. Industrial production rebounded to 1.1% growth in November from October, better than the 0.8% that the market was expecting. But it remains 0.8% below year-ago levels.
U.S. housing data were also stronger than expected. Homebuilders broke ground on 3.2% more homes in November than October, well above the 1.2% growth that economists had projected. In addition, applications for building permits jumped to the highest level in 12 years.
But in the U.K., British Prime Minister Boris Johnson signalled that he won’t soften his Brexit stance now that he has a majority in Parliament, seeking to rule out any extension of an end-of 2020 deadline to strike a trade deal with the European Union. Analysts say it will be difficult to complete a trade deal within a year, which could mean Britain leaving without a deal at the start of 2021 — a prospect that alarms many U.K. businesses.
The dollar USDJPY, -0.03% fell to 109.44 Japanese yen from 109.59 yen on Tuesday.