Friday 15 May 2020 7:34 am

Asian stocks struggle to extend gains as coronavirus hurts US-China relations

Asian stocks have struggled to extend gains despite the optimism over major economies reopening after coronavirus lockdowns, as relations between the US and China deteriorated.

Chinese data indicated that its economy is beginning to recover from the impact of the coronavirus crisis, with global investors watching closely to see how the easing of lockdowns could affect other economies. 

However, new confrontations have emerged between the US and China, dampening the optimism surrounding the new economic data. 

Japan’s Nikkei was up 0.6 per cent after falling 0.3 per cent earlier in trading. Hong Kong’s Hang Seng index dipped 0.03 per cent and the Shanghai Composite index was up 0.16 per cent. 

Analysts were concerned about deteriorating relations between the US and China. 

US President Donald Trump blames China for the coronavirus pandemic, which has killed more than 85,000 Americans. 

Trump has suggested that he could cut ties with China, and said he has no interest in speaking to President Xi Jinping at the moment. 

The US federal pension fund has delayed investment in Chinese shares following pressure from the Trump administration.

“The U.S.-China trade war was the biggest theme for markets last year. It will be a big concern if the conflict escalates beyond trade,” said Takeo Kamai, head of execution at CLSA told Reuters. 

China’s industrial output rose 3.9 per cent in April,  beating expectations for a 1.5 per cent rise and expanding for the first time this year as it slowly lifted its coronavirus lockdown.