Stocks drop as Trump-Kim summit ends, yen climbs

Employees work at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group (JPX), in Tokyo, Japan. (Bloomberg pic)

SYDNEY: Asian stocks extended declines along with US and European futures after the US-North Korea summit ended abruptly without the previously planned joint statement.

Korean assets slumped and the yen pushed higher.

Equities were already on the back foot across the region after disappointing Chinese manufacturing data underscored concerns about the global economic slowdown.

South Korean shares were the main underperformers after the news that President Donald Trump and Kim Jong Un departed the summit venue early in Hanoi.

Treasury yields ticked lower and the dollar steadied. Crude oil futures slipped.

After a stellar two-month rally for global shares, the bar for further gains may be high.

US Trade Representative Robert Lighthizer gave investors no incentive to bid up prices further on Wednesday when he dialled back expectations for a sweeping trade deal with China.

Nor did the latest monthly China manufacturing PMI, which indicated another contraction.

“We still need more expansionary credit and fiscal policy to be implemented to stabilise growth” in China, Betty Wang, senior China economist at ANZ, told Bloomberg TV.

“The economy is still not in a good shape.”

The abrupt end to the Hanoi summit and recent escalation in tensions between India and Pakistan add to a list of investor concerns from trade talks to global growth to the direction of monetary policy.

Federal Reserve Chair Jerome Powell told lawmakers Wednesday that he’ll soon announce a plan to stop shrinking the central bank’s balance sheet, now around US$4 trillion balance.