Asian investors stepped back Tuesday after the previous day’s rally, with some scepticism over the China-US trade deal seeping in, while oil prices pushed higher after Washington flagged harsh sanctions on key producers Iran and Venezuela. World markets fizzed Monday after US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He said they had agreed to pull back from the brink of a potentially damaging trade war. However, while fears about the tariffs spat had roiled equities for months, investors were unable to kick on as they take a closer look at Sunday’s pact, which offered few details. Analysts also pointed out the lack of agreement over intellectual property — a major stocking point for Donald Trump — as well as several other sectors. Also tempering the optimism are worries about higher US interest rates and geopolitical issues. “Markets are going through a bumpy ride,” Bank of Singapore Investment Strategist James Cheo told Bloomberg Television. “This trade truce is still in the early days. It’s really a ceasefire, it’s not a peace treaty as yet. The implementation details are still unclear. There is still some caution among Asian investors.” ‘Strongest sanctions’ Tokyo finished 0.2 percent off, Sydney slipped 0.7 percent, Taipei shed 0.3 percent and Manila eased 0.2 percent. There were also losses in Wellington, Bangkok and Singapore. Shanghai ended with minor gains. Hong Kong and Seoul were closed for public holidays. In early European trade London and Paris were flat, while Frankfurt edged up 0.1 percent. Oil prices extended Monday’s gains of around one percent as the US unveiled its sanctions plans. Secretary of State Mike Pompeo warned Tehran would be hit with the “strongest sanctions in history” while also warning European firms they were at risk if they continued to work with Iran, toughening up Washington’s policy line leaving the nuclear deal this month. That came as Venezuela was targeted with fresh measures after the re-election of President Nicolas Maduro, which the US branded a “sham”. Trump signed an executive order barring Americans from buying debt from Venezuela, cutting off an important source of revenue for the cash-starved regime. The measures did not target the country’s crucial oil exports, though analysts said they would likely be in the firing line at some point. The moves put upward pressure on crude, which had been drifting after last week’s healthy gains, which have sent prices to highs not seen since late 2014. “Fresh sanctions on Venezuela after the weekend election — including on bond-buying — and a belligerent speech from US Secretary of State Pompeo on Iran turned traders from some mild selling back to the buy side,” said Greg McKenna, chief market strategist at AxiTrader. The dollar rose against the yen, euro and pound as investors await the release of minutes from the Federal Reserve’s most recent policy meeting hoping for clues about its plans for interest rates. Key figures Tokyo – Nikkei 225: DOWN 0.2 percent at 22.960.32 (close) Shanghai – Composite: FLAT at 3,214.35 (close) London – FTSE 100: FLAT at 7,861.23 Hong Kong – Hang Seng: Closed for a public holiday Euro/dollar: DOWN at $1.1772 from $1.1789 Pound/dollar: DOWN at $1.3418 from $1.3429 Dollar/yen: UP at 111.06 yen from 111.03 yen Oil – West Texas Intermediate: UP 32 cents at $72.56 Oil – Brent North Sea: UP 22 cents at $79.44 per barrel New York – Dow: UP 1.2 percent at 25,013.36 (close). Published in Daily Times, May 23rd 2018.