Asian shares mixed as US says trade deal with China ready

Asian shares meandered in a narrow range on Friday despite another session of record highs on Wall Street.

There was little apparent reaction Friday after U.S. Treasury Secretary Steven Mnuchin said that a preliminary trade deal with China was ready for signing in early January. Mnuchin told CNBC that he was “very confident” the deal would help rebalance trade and open Chinese markets to more American products and services.

Japan’s Nikkei 225 index edged 0.1% lower to 23,840.41 and the S&P ASX 200 in Australia lost 0.3% to 6,816.30. The Shanghai Composite index shed 0.2% to 3,012.02. Hong Kong’s Hang Seng index climbed 0.3% to 27,882.16 while the Sensex in Mumbai advanced 0.2% to 41,744.80. South Korea’s Kospi picked up 0.6% to 2,197.67. Shares fell in Taiwan and most of Southeast Asia.

Overnight, U.S. markets shrugged off the impeachment of President Donald Trump by the House of Representatives, chosing to focus instead on encouraging earnings reports from several big companies.

Technology companies led the rally, extending the market’s gains for the week and pushing the major indexes to more record highs.

The major stock indexes climbed to record highs late last week as investors welcomed news that the U.S. and China had taken steps to de-escalate their trade conflict. Stocks have mostly continued their record-breaking run this week.

“Indeed, agreement of the ‘Phase 1’ deal between the U.S. and China has removed quite a lot of uncertainties in the outlook for 2020, and with the global growth revival trade is looking better and better by the day, equity investors are reveling in the holiday cheer,” Stephen Innes of AxiTrader said in a commentary.

The deal with Beijing is “just going through what I would consider to be a technical, legal scrub,” Mnuchin said. He said he expected the agreement to result in a doubling of U.S. farm exports to China and that American farmers would be up to the task. China, however, has not confirmed any details of its plans for purchases of U.S. farm products. A Commerce Ministry spokesman in Beijing on Thursday said only that the two sides were in “close communication.”

The broad gains on Wall Street erased the S&P 500’s slight losses from a day earlier. The benchmark index has notched gains six out of the past seven days.

The S&P 500 rose 0.4% to 3,205.37. The Dow Jones Industrial Average gained 0.5%, to 28,376.96, a record. The Nasdaq composite climbed 0.7% to 8,887.22, also a record. The Russell 2000 index of small-cap stocks added 0.3% to 1,667.09.

A batch of encouraging earnings reports from several big companies helped keep investors in a buying mood. Rite Aid, Conagra Brands and Micron Technology rose after posting quarterly results that exceeded analysts’ forecasts.

Stock indexes were little changed for much of the day. Stocks, bonds, gold and a measure of fear among investors on Wall Street made only modest moves in the first day of trading after President Donald Trump’s impeachment by the House of Representatives.

Trump became just the third U.S. president to be impeached after the House voted Wednesday on charges of abuse of power and obstructing Congress in an investigation.

The President had warned months ago that his impeachment would roil markets, but traders say it has virtually no impact. That’s mostly because they see it as extremely unlikely that he or his market-friendly policies will leave office before the end of his term.

Trump, who has often reveled on Twitter when stock prices are rising, warned in October that “The Impeachment Hoax is hurting our Stock Market.”

“We’ve kind of known how this was going to play out for months,” said Scott Ladner, chief investment officer at Horizon Investments. “That just means that everybody has had an opinion, and whatever opinion that is it’s been priced into the market.”

A gauge measuring how worried traders are about upcoming swings for the S&P 500 rose only 0.6%.

A report by the Philadelphia Federal Reserve said that manufacturing activity was nearly flat in the region last month. The pace of sales of previously occupied homes also weakened last month, as more Americans get priced out of the rising housing market.

Benchmark crude oil lost 7 cents to $61.11 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, gained 5 cents to $66.59 a barrel.

The dollar slipped to 109.31 Japanese yen from 109.35 yen on Thursday. The euro was unchanged, at $1.1121.