Asian markets have started the week with a dip as ongoing U.S.-China trade talks continue to overshadow growth prospects.
“We think the market may pause for breath over the coming two to three weeks… While we are still bullish… based on valuations, technicals and the exogenous environment Sentiment for the rest of the month is likely to be heavily influenced by the ongoing U.S.-China trade negotiations,” Paul Greer, a money manager at Fidelity International, commented.
Worries ahead of pivotal talks next week have raised doubts across stock markets in early morning trading with Sydney and South Korea both edging lower and a slight uptick in China due only to exchanges reopening after a one-week holiday.
Kerry Craig, global market strategist at JPMorgan Asset Management, said: “We still have concerns about global growth and that centers on those U.S.-China negotiations. We’re unlikely to see any massive moves this week saying we’re going to get a deal on that.”
Ending its longest upward stretch in a year, the MSCI Emerging Markets Index declined last week finally breaking through its 200-day moving average late January, to be dragged below that level on Friday.
The last time the measure fell below the 200-day level was in May, about four months before it sank into a bear market.
“Ongoing talks make a unilateral devaluation [of the yuan] very unlikely,” New York-based Zach Pandl of Goldman Sachs Group, said.