World shares mixed as China affirms trade talks to go ahead

Image 1 of 2

An electronic stock board shows Japan's Nikkei 225 index at a securities firm in Tokyo Tuesday, May 7, 2019. Asian stock markets rebounded Tuesday after Beijing said trade negotiators were preparing to go to Washington despite President Donald Trump’s threat to escalate their tariff war. (AP Photo/Eugene Hoshiko)

Global stock markets were mixed Tuesday after China said its economy czar will go to Washington for trade talks despite U.S. President Donald Trump's threat to escalate their tariff war.

China's main stock index rose 0.7% and most other Asian markets also rebounded, while shares in Europe fell and Wall Street appeared headed for a lower open.

The Chinese government said Vice Premier Liu He will go to Washington as planned despite fears he might cancel after Trump threatened to escalate a fight over Beijing's technology ambitions. That might help to keep alive hopes that the battle, which threatens to drag on global economic growth, could be settled as early as this week.

"The base case still remains we see a framework agreement reached, but the market is still repricing in the risk," Edward Moya of Oanda said in a report.

In midday trading in Europe, London's FTSE 100 was down more than 1% to 7,303, and France's CAC 40 fell more than 0.7% to 5,442. Germany's DAX didn't fare much better, declining 0.6% to 12,212.

On Wall Street, futures for the Standard & Poor's 500 index and the Dow Jones Industrial Average were each down about 0.6%.

Tokyo's Nikkei 225 plunged 1.5% to 21,923.72 as trading resumed following a weeklong holiday. The Shanghai Composite Index closed at 2,926.39 and Hong Kong's Hang Seng added 0.5% to 29,363.02. Sydney's S&P-ASX 200 picked up 0.2% to 6,295.70 and benchmarks in New Zealand, Taiwan and Singapore advanced.

India's Sensex was off 26 points at 38,580.44.

Trump's threat on Sunday revived jitters that had been largely put to rest by statements from both sides that negotiations were making progress. The American president accused Beijing of backtracking on commitments made in the rapid-fire negotiations.

Trump threatened to raise tariffs on $200 billion of Chinese goods to 25% from 10%, effective Friday. He said he would impose increases on an additional $325 billion of imports, covering everything China sells to the United States.

"Beijing is not a big fan of hostage situations," said Vishnu Varathan of Mizuho Bank in a report. "The tight deadline alongside threats of widening the tariff net may not play out favorably for prospects of an imminent deal."

ENERGY: Benchmark U.S. crude lost 62 cents to $61.63 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 31 cents on Monday to close at $62.25. Brent crude, used to price international oils, shed 89 cents to $70.35 per barrel in London. It rose 39 cents the previous session to $71.24.

CURRENCY: The dollar edged down to 110.63 yen from Monday's 110.72 yen. The euro was little-changed at 1.1200.