World stocks tread water before Trump-Xi 'main event'

LONDON: Global stock markets slipped in lacklustre trading on Friday as investors awaited a crucial weekend meeting between Donald Trump and Xi Jinping.

The stormy build-up to the G20, which kicks off on Friday for two days of talks, has been dominated by US President Donald Trump's tough stance on trade and climate fears, and by simmering tensions with Russia.

While the outcome of Saturday's crunch talks between Trump and Chinese President Xi Jinping hangs in the balance, there are hopes the heads of the world's top two economies can find a way to ease their trade row, which has seen them exchange deep import tariffs.

Key European exchanges closed mildly lower, with London the worst performer because of Brexit worries, while on Wall Street the Dow also slipped slightly in late morning New York trade.

"There's been a little bit of downside seen in the stock markets as investors nervously await the outcome of key meetings between world leaders at the G20 summit in Buenos Aires," said XTB analyst David Cheetham.

"The main event on traders' radars is clearly the Trump-Xi meeting -- and what this means for trade between the world's two largest economies going forward."

- 'Takes two to tango' -

"The risks still remain tilted to the downside... as the tensions over trade and politics between China and the US hang over sentiment like a dark cloud," noted CMC Markets UK analyst Michael Hewson.

"President Trump has already said he is close to a deal on trade with China; he's just not sure that he wants to do it, which raised some optimism that some form of fudged compromise might come out of the weekend meeting.

"The Chinese foreign ministry has said this morning it hopes that the US can show sincerity and meet China halfway in talks.

"We shall see, but as the song says it takes two to tango, and it's not immediately clear that the United States wants to."

In Asia, Tokyo stocks closed up 0.4 percent, Hong Kong added 0.2 percent, while Shanghai finished 0.8 percent higher, with dealers poring over data showing Chinese manufacturing stalled in November as the effects of Trump's multi-billion-dollar tariffs begin to bite.

- OPEC meeting up next -

Beyond the G20, traders are eyeing the following weekend's gathering of OPEC and non-OPEC oil producers, where Saudi Arabia and others are expected to cut output in a bid to support prices.

But oil prices dipped Friday in volatile deals, one day after New York crude had ducked below $50 per barrel for the first time in almost 14 months.

The market had briefly bounced higher in Asian trading hours on a report that Russia will join in any output reduction.

- Key figures around 1645 GMT -

London - FTSE 100: DOWN 1.0 percent at 6,970.78 points (close)

Frankfurt - DAX 30: DOWN 0.4 percent at 11,257.24 (close)

Paris - CAC 40: DOWN 0.4 percent at 5,003.92 (close)

EURO STOXX 50: FLAT at 3,173.13

New York - Dow Jones: DOWN 0.2 percent at 25,298.13

Oil - West Texas Intermediate: DOWN 90 cents at $50.54 per barrel

Oil - Brent Crude: DOWN $1.01 cents at $58.90

Tokyo - Nikkei 225: UP 0.4 percent at 22,351.06 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 26,506.75 (close)

Shanghai - Composite: UP 0.8 percent at 2,588.19 (close)

Euro/dollar: DOWN at $1.1354 from $1.1393 at 2200 GMT Thursday

Dollar/yen: UP at 113.54 yen from 113.48

Pound/dollar: DOWN at $1.2763 from $1.2791