SYDNEY: Asian stocks drifted Tuesday as the rush of optimism on US-China trade talks from early Monday faded. The pound gained on the possibility of a Brexit delay.
Equities fell in Japan, Hong Kong and Australia while Chinese shares posted modest gains after jumping yesterday.
S&P 500 Index futures fell after the gauge closed at the highest in almost four months and European futures pointed lower.
While US President Donald Trump raised the possibility of signing a new trade deal with Chinese counterpart Xi Jinping, he also said an agreement “might not happen at all.”
The yen edged higher and Treasury yields dipped.
Traders will be looking for any signs that the progress on trade is enough to build on a global rally in equities that has been tested by slowing economic growth.
Also in focus this week will be a hearing from Federal Reserve Chairman Jerome Powell, where investors will get the latest read on monetary policy and discussion of the central bank’s balance sheet.
“The markets have really started to factor in the possibility of rate cuts,’’ Dwyfor Evans, a macro strategist at State Street Global Markets in Hong Kong, said on Bloomberg Television.
Powell if anything “needs to probably bring the market back on track to argue that, well, we’re just staying put for now,’’ he said.
Meanwhile, India’s rupee fell and stocks dropped after the government said its fighter jets bombed terror camps across the border on the Pakistani side, 12 days after the Pakistan-based terror group carried out a deadly attack in Kashmir.
Elsewhere, the pound climbed as Prime Minister Theresa May is considering a plan to delay Brexit and stop the UK leaving the European Union with no deal next month, according to people familiar with the situation.
Oil extended losses after tumbling the most in four weeks on Trump’s criticism that prices are too high.