HONG KONG (AFP) - Asian stocks retreated yesterday as the US hailed "productive" trade talks in Beijing despite earlier reports suggesting an impasse, while Wall Street was hit by weak US retail sales.
Bourses across the region were already well down as Chinese inflation eased more than expected, reflecting sluggish demand.
With no further detail available about the outcome of the talks, traders turned their attention to a planned meeting between US officials and Chinese President Xi Jinping in Beijing yesterday.
American and Chinese officials had gathered in a bid to resolve differences on trade before US President Donald Trump's March 1 deadline for escalating tariffs on $200 billion of Chinese imports.
Trump indicated earlier in the week he could extend the deadline if progress was made by the delegates.
His economic advisor Larry Kudlow said the talks were "covering all the ground", and US Treasury Secretary Steven Mnuchin tweeted that the meetings were "productive".
But multiple reports said there had been little progress on thorny issues such as US demands that China crack down on forced technology transfers and reduce subsidies that favour domestic companies.
Hong Kong shed 1.9 percent while Shanghai fell 1.4 percent. Tokyo dropped 1.1 percent, with equities weighed down as the safe-haven yen rose, harming exporters.
Seoul, Taipei, Wellington and Jakarta all posted losses too, though Sydney edged up.
The bearish mood was amplified by official data showing factory and consumer price inflation in China rose at a slower rate than expected in January.
The weak producer prices were “a concern since these are highly correlated with profit growth in industry”, Julian Evans-Pritchard of Capital Economics said in a research note.Wall Street fell earlier after data showed US retail sales had dropped 1.2 percent in December the largest month-to-month decrease in nine years.
The report suggested American consumers had held back during a peak holiday shopping season that coincided with a plunge in the stock market.
Markets shrugged off the news that the US Congress passed a spending bill to avert a government shutdown, which Trump has signalled he will sign before midnight Friday.Any optimism was offset as the American president alarmed lawmakers with a plan to declare a national emergency to fund his controversial wall on the Mexico border.At the start of trading in Europe, London was flat, Paris edged up 0.1 percent and Frankfurt shed 0.4 percent.
On the currency markets, the pound won back some of its earlier losses after British Prime Minister Theresa May had suffered another defeat in parliament over her Brexit strategy, just 43 days before Britain is due to leave the European Union.