Trade War And Civil Unrest Shake Markets Across Asia In Early Trading

Early trading in the Asian market on Tuesday seems to reflect a convoluted view based on the United States-China trade talks, a report by CNBC shows, but the mood in Beijing was less than optimistic. It is mainly attributed to the failure of the U.S. and China to sign even a partial trade deal; this has investors' minds weighing heavily. If you factor in the civil unrest that is going on in Hong Kong, there is nothing to wonder about.

The impact of the situation has rippled across the whole of Asia, not just China Japan's Nikkei 225 declined 0.3 percent while South Korea's KOSPI index fell 0.5 percent and China Shanghai Composite slumped 0.2 percent. SHCOMP, however, managed to recover and was currently trading up 0.4 percent. The Hang Seng Index opened with less than stellar numbers as the market started in the red but was the last trading up about 1%. There are signs of hope for improvement, but the markets have remained relatively stagnant.

The Hong Kong market has been trying to work its way back after some late-week losses, in fact, the Hang Seng Index or HSI reported its worst stretch since early August. It is highly probable that this is a result of protests that are currently still going on in the city. The political climate in the area has investors unsure.

The situation in Hong Kong, coupled with no breakthrough between the U.S. and China in a trade deal, definitely has all the markets shaken up. On a positive note, though, the U.S. government did extend a temporary general license, which will allow American companies to sell Huawei products as the company has found itself to be the focal point poster child of rising tensions between the two countries.

This move may ease things a bit, but it has not done much to ease the minds of investors as U.S. stock futures remained somewhat level, trading just over the positive mark. However, this is the third time that such an extension has been granted the markets are not showing much faith.

While this is some good news, President Trump and Chinese President Xi Jinping have failed to reach an accord that will satisfy both countries. The lack of confidence in the market appears to be a direct result of this; adding the unrest in Hong Kong to the mix makes a difficult situation worse. It is safe to say that should the two world powers reach an agreement; the markets would most likely respond in kind.

The last month has been marked with expectations of a partial trade agreement, but negotiations have continued to stall out. The markets appear to reflect the indecisiveness of the leaders.