Asia disputes rumble on

The Sino-US dispute seems no closer to a resolution despite weeks of back-and-forth on what negotiators call the phase one of the deal. Messages from the two sides remain contradictory. While some Chinese officials keep saying optimistic things about the state of the talks an interview with an unnamed White House official published by Reuters Thursday poured cold water on hopes of a resolution.

The continued rumbling of protests in Hong Kong is not letting up either and Asian investors in particular are keeping a wary eye on the developments there. The local stock index Hang Seng dropped 1.6% in early trade and although indexes in Shanghai and Tokyo lost less ground, the overall sentiment remained fairly cautious.

Matthey, Mail lead fallers

Metals and chemicals firm Johnson Matthey led the FTSE fallers with a 6.56% decline after it reported a 2% decline in profits. However, unlike many other industries that fight against the tide of the times Johnson Matthey is actually well placed to benefit from calls for more environmental protection. Its trademark products are catalytic converters that control car emissions and it is working on new lines that will be used in other industries too. That explains the company’s willingness to up dividends for the year in expectations of a stronger second half performance.

On FTSE 250 the biggest story is Royal Mail with a 17.49% decline. Though the postal service reported an operating profit for the first half of the year, turning around last year’s loss, investors remain bearish on the stock. Its planned restructuring is currently behind schedule and possibly the even bigger bigger dampener is a threat of strike in December. Not least, the postal service is on Jeremy Corbyn’s nationalization radar which is adding to the stocks’ lack of popularity.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.