Asian stocks gained Tuesday after Wall Street gave back some of last week’s huge gains, the American and Chinese presidents met and China’s consumer spending shrank in a sign its economy is weakening.
Shanghai, Tokyo and Hong Kong, which are the bulk of the region’s market capitalization, advanced. South Korea and Sydney declined. Oil prices retreated.
Wall Street’s benchmark S&P 500 lost 0.9% on Monday, giving back part of last week’s 5.9% surge after lower U.S. inflation encouraged hopes the Federal Reserve might ease off planned rate hikes to rein in surging prices.
Presidents Joe Biden and Xi Jinping met during a summit of the Group of 20 major economies in Indonesia. That fed hopes for an easing of U.S.-Chinese tension over security, trade, technology and human rights.
Monday’s meeting was “surprisingly positive,” but the “feel-good factor that had been driving markets following the softer-than-expected October CPI release in the U.S. evaporated,” said Robert Carnell and Nicholas Mapa of ING in a report.
The Shanghai Composite Index gained 1.3% to 3,123.26 after Chinese consumer spending contracted by 0.5% in October over a year ago under pressure from increased anti-virus controls. Growth in factory activity also weakened.