Investors cut exposure to risk assets after Trump-Xi meeting failed to deliver significant results.
JAKARTA – Market sentiment across Asia weakened again after the meeting between Donald Trump and Xi Jinping was seen as failing to produce any meaningful breakthrough, either on trade or geopolitical issues.
Senior Market Analyst at OANDA, Kelvin Wong, said investors had previously expected the Beijing meeting to deliver concrete steps to ease tensions between the United States (US) and China.
However, the outcome of the meeting between the leaders of the world’s two largest economies was viewed as limited, Wong said.
“Markets were ultimately disappointed after expecting progress on trade and geopolitical agreements, while tensions between China and Taiwan remain fragile,” Wong said in a report released on Monday.
During the meeting, China also pledged to purchase 200 Boeing aircraft. However, Wong said the figure fell well short of market expectations, which had anticipated transactions involving around 500 US-made aircraft.
In addition, the US and China only agreed to maintain “strategic stability” for three years, without outlining any new economic policy details.
Wong also highlighted Xi Jinping’s stern warning over Taiwan, saying it could trigger “a very dangerous situation”. The remarks were seen as adding to fragile regional risk sentiment and weighing on the yuan and other Asian currencies traded offshore.
Shortly after the Trump-Xi meeting, global markets also came under pressure after the yield on the 10-year US Treasury rose to 4.59%.
Wong said market participants had begun scaling back expectations of Federal Reserve (Fed) rate cuts in 2026 due to persistently high inflation.
S&P 500 and Nasdaq 100 futures fell around 0.6%-0.7% during early Asian trading this week. Meanwhile, WTI and Brent crude prices climbed as much as 3% following the closure of the Strait of Hormuz, although price movements became more limited on Tuesday.
Across emerging Asia-Pacific markets, stock indices traded mixed as of 10:00 AM WIB on Tuesday.
Jakarta Composite Index (JCI) led gains with a 0.50% rise, followed by the Hang Seng Index up 0.42%. Meanwhile, South Korea’s KOSPI plunged 3.56%, followed by declines in other regional indices, including Malaysia’s FBMKLCI by 0.02%, Thailand’s SET by 0.30%, and the Philippines’ PCOMP by 0.32%. (KR/ZH)
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