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Asia: Traders cautious, rally checked by profit-taking
[HONG KONG] Asian traders moved cautiously on Wednesday following another strong day of rallies, while a close watch is being kept on the latest leg of Donald Trump's regional tour as he prepares to visit China.
While optimism about the global economy and a string of positive earnings have provided support to world equities - pushing them to record or multi-year highs - profit-taking and lingering Middle East tension is keeping further gains in check.
After stopping in South Korea, the US president heads to Beijing on Wednesday to meet his Chinese counterpart Xi Jinping and dealers will be looking to see if they discuss trade, which has been a thorny issue between the two since Mr Trump's election a year ago.
The summit comes on the day China releases its monthly import and export data. Greg McKenna, chief market strategist at AxiTrader, said: "If the forecasters are right it's bad timing for an uplift in the trade surplus."
In early trade Shanghai stocks were up 0.1 per cent while Hong Kong dipped 0.1 per cent and Tokyo shed 0.3 per cent a day after ending at a near 26-year high. Seoul edged up 0.4 per cent.
Sydney and Singapore were flat, while Wellington, Taipei and Manila were all down.
Easing concerns about the North Korea crisis were being offset by worries about the Middle East after Saudi Arabia accused Iran of "direct military aggression" over a Yemeni rebel missile attack near Riyadh.
Saudi Arabia's powerful crown prince had accused Iran of supplying missiles to the rebels, which he said "could be considered as an act of war".
On currency markets the dollar took a step back against its major peers after a report said Mr Trump's much-vaunted corporate tax cuts could be delayed.
The Washington Post citied unnamed sources as saying Senate Republicans were considering putting off the cuts by a year to ease their cost and impact.
Mr Trump's tax cut promises helped drive a rally in the dollar when they were released last month.
"Traders will be watching closely as the horse-trading continues in the week and weeks ahead. There is plenty of water to flow under the bridge and plenty of self-interest groups to be satisfied," said Mr McKenna.