Markets mixed as dealers await trade talks

• Global stock markets traded mixed Thursday with investors cautious as they sifted through conflicting reports.
• Hong Kong, Tokyo and Shanghai rose on tentative hopes of a breakthrough.
• The SCMP report "reverses the trade optimism that was dominating overnight flow.

LONDON: Global stock markets traded mixed Thursday with investors cautious as they sifted through conflicting reports about upcoming China-US trade talks.

Hong Kong, Tokyo and Shanghai rose on tentative hopes of a breakthrough, while European markets mostly ran out of steam.

"Asia stocks perked up overnight on news of a potential trade talk breakthrough but European markets were more reserved," said City Index analyst Fiona Cincotta.

Investors have been broadly upbeat in recent weeks that the meeting in Washington between top-level representatives would see at least some progress.

However, with the much-anticipated gathering due to start within hours, Hong Kong's South China Morning Post reported pre-meeting discussions had not made any progress on key areas such as forced technology transfers, and that the meet would be cut in half to just one day.

That came after Wall Street's three main indexes ended with healthy gains on reports that a pared-down deal was still possible, with Beijing boosting agricultural purchases and Washington delaying the imposition of new tariffs next week.

Tensions were already showing this week after the US unveiled restrictions on 28 Chinese entities over human rights violations in Xinjiang and imposed visa restrictions on some officials, while a report said the White House was considering curtailing American investment in the country.

For its part, sources were reported to have said China had narrowed the issues it was willing to discuss as it felt in a stronger position owing to Donald Trump facing an impeachment inquiry at home and a weakening economy.

The SCMP report "reverses the trade optimism that was dominating overnight flow as investors were hoping that at minimum, some type of a deal could be forged", said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

"So instead of debating how encompassing the deal might be, investors are now back to plucking petals from a flower guessing if there will be a deal at all."

 Greenback sags

In foreign exchange markets, the dollar was lower against most other currencies after minutes from the Federal Reserve's September policy meeting showed it was growing concerned about the impact of Trump's trade war.

The central bank is expected to cut interest rates for a third time since July when the board meets again later this month.

Oil prices extended Wednesday's losses following data showing a bigger-than-forecast pick-up in US inventories that reinforced worries about the impact on demand from a global slowdown and trade frictions.

The data reversed a rally of more than one percent in the commodity that came after Turkey launched an offensive against Kurdish militants in northern Syria. There was little major impact from the unrest in Ecuador that has hit the country's production.

Key figures around 1100 GMT

London - FTSE 100: DOWN 0.1 percent at 7,162.12 points

Paris - CAC 40: UP 0.4 percent at 5,518.63

Frankfurt - DAX 30: FLAT at 12,097.73

EURO STOXX 50: FLAT at 3,462.68

Tokyo - Nikkei 225: UP 0.5 percent at 21,551.98 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 25,707.93 (close)

Shanghai - Composite: UP 0.8 percent at 2,947.71 (close)

New York - Dow: UP 0.7 percent at 26,346.01 (close)

Euro/dollar: UP at $1.1028 from $1.0971 at 2100 GMT

Dollar/yen: DOWN at 107.43 yen from 107.48 yen

Pound/dollar: UP at $1.2243 from $1.2206

Euro/pound: UP at 90.07 pence from 89.89 pence

Brent North Sea crude: DOWN 0.1 percent at $58.24 per barrel

West Texas Intermediate: DOWN 0.1 percent at $52.55