A woman walks by an electronic stock board of a securities firm in Tokyo, Tuesday, July 30, 2019. Shares were mostly higher in Asia on Tuesday as envoys from the U.S. and China prepared to resume trade talks, this time in Shanghai. (AP Photo/Koji Sasahara)

World shares mixed as China-US trade talks set to resume

July 30, 2019 - 4:44 am

BANGKOK (AP) — World shares were mixed Tuesday as investors awaited an expected interest rate cut by the U.S. Federal Reserve and watched for progress in trade talks between the U.S. and China.

Germany's DAX lost 0.7% to 12,322.92 and the CAC 40 in France gave up 0.4% to 5,577.45. Britain's FTSE 100 added 0.2% to 7,697.91. Wall Street looked set for a tepid start with the future contract for the Dow Jones Industrial Average down nearly 0.1% at 27,179.00. That for the S&P 500 fell 0.1% to 3,018.70.

Traders expect the Federal Reserve will cut its benchmark short-term rate on Wednesday to help ensure U.S. economic growth in the face of trade uncertainty. Investors estimate the Fed will cut its rate by a quarter of a percentage point from its current range of 2.25% to 2.50%. That would be the Fed's first rate cut in a decade.

In the meantime, the U.S. and China were heading into another round of trade negotiations Tuesday in Shanghai. Investors are hoping Beijing and Washington will avoid another escalation in tariffs like the one that occurred after talks collapsed in May.

Officials have downplayed the potential for a breakthrough, however, since the same issues that caused talks to bog down earlier remain.

In Asia, Japan's Nikkei 225 index climbed 0.4% to 21,709.31 after the Bank of Japan opted to keep its policy intact and leave its benchmark interest rate at minus 0.1%. But it suggested it might find ways to help boost growth if necessary.

The Shanghai Composite index added 0.4% to 2,952.34, while Hong Kong's Hang Seng clawed back losses that followed clashes between protesters and police over the weekend, gaining 0.1% to 28,146.50. In South Korea, the Kospi gained 0.5% to 2,038.68.

Australia's S&P ASX 200 advanced 0.3% to 6,845.10. Shares fell in Taiwan, Bangkok and Singapore but rose in Jakarta.

The gains in Tokyo came despite news that industrial production sank 3.6% from the month before in June. Given uncertainties over global demand and trade disputes, economists have been downgrading their growth forecasts, with the BOJ cutting its own annual growth estimate for the current year by 0.1% to 0.7%.

"The Bank of Japan struck a dovish tone today, promising further easing measures if needed. But we still think it will refrain from lowering interest rates any further," Marcel Thieliant of Capital Economics said in a commentary.

Looking ahead, traders are awaiting the U.S. government's monthly jobs report for July, which will be released on Friday. Investors also will be wading through a heavy slate of corporate earnings reports this week.

ENERGY: Benchmark crude oil rose 47 cents to $57.34 per barrel in electronic trading on the New York Mercantile Exchange. It gained 67 cents to settle Monday at $56.87 a barrel. Brent crude oil, the international standard, gained 54 cents to $64.16 a barrel.

CURRENCIES: The dollar slipped to 108.58 Japanese yen from 108.78 yen on Monday. The euro strengthened to $1.1147 from $1.1145.

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