Asian stock markets retreat after surge on China tariff cut

US & World

A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Feb. 6, 2020. Asian stock markets have surged after President Donald Trump was acquitted in an impeachment trial and China promised tax cuts and other help to businesses reeling from a virus outbreak. (AP Photo/Ahn Young-joon)

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Asian stock markets retreated Friday following a surge after China announced a tariff cut on U.S. imports.

Market benchmarks in Shanghai, Hong Kong, Seoul and Sydney all declined. Tokyo was flat. Major Asian markets jumped more than 2% on Thursday after Beijing said it will cut duties on $75 billion of U.S. goods as part of a trade truce with Washington.

Wall Street closed higher for a fourth day, propelled by gains for technology stocks and strong corporate earnings reports.

China’s tariff cut “boosted sentiment,” though “gains were tempered by continued concerns around the impact of the coronavirus outbreak,” said Mizuho Bank in a report.

Chinese factories and offices are starting to reopen following an extended Lunar New Year holiday, but companies are forecasting big revenue declines due to the closure of stores, amusement parks, cinemas and other businesses.

Beijing’s tariffs reductions, which follow U.S. cuts last month on Chinese goods, are part of a “Phase 1” trade agreement with Washington aimed at ending their fight over China’s technology ambitions and trade surplus. There was no indication China altered its cuts in response to the virus outbreak, but the surprise oannouncement helped to buoy market sentiment.

Hong Kong’s Hang Seng index fell 0.8% to 27,279.31 and the Shanghai Composite Index was off 0.6% at 2,849.51. Tokyo’s Nikkei 225 lost 0.2% to 23,872.80.

The Kospi in Seoul sank 1.1% to 2,202.58 and Sydney’s S&P-ASX 200 lost 0.5% to 7,012.10.

On Wall Street, the benchmark S&P 500 index rose 0.3% to 3,345.78. The Dow Jones Industrial Average gained 0.3%. The Nasdaq climbed 0.7% to 9,572.15.

Beijing is also promising tax cuts and other help to businesses in a bid to offset the economic blow from the virus outbreak that has put the world’s second-largest economy on lockdown. The extent of potential losses is unclear.

Worries about the potential global economic fallout from the outbreak spurred a mid-January slump for U.S. stocks. Investors appear to have set aside those concerns this week, focusing instead on encouraging U.S. economic data and company earnings reports.

Cognizant led the gainers in the technology sector Thursday, vaulting 9.8%. The information technology consulting firm’s fourth-quarter earnings topped Wall Street’s expectations.

Twitter surged 15% after the messaging service reported surprisingly good growth for daily users and solid revenue in the fourth quarter. The most recent quarter marks the first time the company’s revenue topped $1 billion.

ENERGY: Benchmark U.S. crude gained 12 cents to $51.07 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 20 cents on Thursday to close at $50.95. Brent crude, used to price international oils, added 17 cents to $55.10 per barrel in London. It fell 35 cents the previous session to $54.93.

CURRENCY: The dollar declined to 109.91 yen from Thurdsay’s 109.97 yen. The euro was unchanged at $1.0983.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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