Asia-Pacific Markets Open Mixed Amid U.S.-China Talks and Await Beijing Data

Asia-Pacific Markets Open Mixed Amid U.S.-China Talks and Await Beijing Data

Asia-Pacific equity markets displayed mixed openings Monday as investors closely monitored high-stakes negotiations between U.S. and Chinese officials in Madrid. The talks, which commenced Sunday, focus on critical national security, economic, and trade issues, including the looming deadline for the U.S. divestment from Chinese short video app TikTok and ongoing tariff disputes.

Leading the U.S. delegation are Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, who met with Chinese Vice Premier He Lifeng and top trade negotiator Li Chenggang. These discussions carry significant implications for bilateral relations and global markets amid heightened geopolitical tensions.

Concurrently, market participants awaited key economic indicators from China, including retail sales, fixed asset investment, and urban unemployment data, scheduled for release later in the day. These figures will provide critical insight into the health of China’s economy amid global uncertainties.

Market Performance Across the Region

Australia’s ASX/S&P 200 index opened down 0.75%, reflecting investor caution amid the geopolitical developments. In contrast, South Korea’s Kospi index advanced 0.67% to a record high of 3,420.23, marking its tenth consecutive session of gains. The Kosdaq, which tracks smaller companies, rose by 0.4%.

Hong Kong’s Hang Seng Index futures indicated a slight decline, with contracts trading at 26,380 compared to the prior close of 26,388.16. Meanwhile, markets in Japan and Malaysia remained closed for public holidays.

U.S. Market Context and Federal Reserve Outlook

U.S. equity futures showed minimal movement during early Asian trading hours as investors anticipated the Federal Reserve’s policy meeting later this week. Market expectations have shifted towards a potential interest rate cut following recent economic data pointing to a softening labor market and subdued inflationary pressures.

Last week, the Nasdaq Composite reached a new record high, buoyed by a 2% weekly gain. The S&P 500 posted its strongest weekly performance since early August with a 1.6% rise, while the Dow Jones Industrial Average recorded its first positive weekly return in three weeks, climbing 1%.

These gains reflect growing optimism that the Fed may ease monetary policy to support economic growth amid signs of slowing employment and inflation.

— Reporting by CNBC’s Sarah Min contributed to this article.