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Asian markets surge as Trump tweet lifts trade hopes
HONG KONG, Nov 2, 2018 (BSS/AFP) – Hong Kong and Shanghai led another
rally across Asian markets Friday after Donald Trump’s tweet hailing positive
talks with Chinese President Xi Jinping was seized on by dealers hoping for a
breakthrough in their trade row.
The gains follow a third straight advance on Wall Street as a sense of
optimism returns after a diabolical October, with riskier, higher-yielding
currencies enjoying a bounce against the dollar, and the pound holding most
gains.
Dealers were set for a strong end to a healthy week after Trump’s tweet,
which was a rare sign of hope in the months-long stand-off between the
world’s top two economies that many fear could batter global growth.
“Just had a long and very good conversation with President Xi Jinping of
China. We talked about many subjects, with a heavy emphasis on Trade,” he
wrote.
He added that trade talks were “moving along nicely” and meetings were
“being scheduled” at the G20 summit in Buenos Aires at the end of the month.
The comment comes days after he warned he would impose tariffs on all
China’s shipments to the US before saying he thought he could “make a great
deal with China” but it was not yet ready.
Hong Kong surged more than two percent and Shanghai jumped more than one
percent.
The markets were already buoyant after Beijing said it would introduce
measures to kickstart the stuttering economy following a string of weak data,
including growth at its slowest pace in nine years during the third quarter.
The yuan also staged a recovery, jumping almost one percent to 6.9151 per
dollar Friday, having been wallowing around 10-year lows and close to the 7
level.
Tokyo ended the morning 1.2 percent higher, Singapore jumped one percent,
Seoul piled on 2.2 percent and Taipei was 0.5 percent up. There were also
healthy gains in Wellington and Jakarta but Sydney dipped 0.3 percent.
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– ‘Still cautious’ –
“Positive comments from President Trump over US-China trade tension are
cheering the market in the short term,” said Tai Hui, chief market strategist
for Asia Pacific at JP Morgan Asset Management.
“Dollar moderation, the stabilising trade relationship between US and
China and more stimulus from Beijing will be the key ingredients to revive
market confidence in Asia.
“While we are still cautious over a full resolution of recent tensions in
the medium term, resumption of dialogue between Washington and Beijing would
be good enough to investors for now.”
Oil prices extended Thursday’s plunge of more than two percent on
oversupply worries, with Iranian sanctions due within days but other major
producers ready to pick up the slack.
The commodity has lost around 15 percent from four-year highs at the start
of last month as Russia and OPEC said they would bolster output.
“OPEC and other major producers appear to have gotten the message from US
President Donald Trump and increased production, but there are still
questions on how much will the sanctions actually impact Iranian exports,”
said National Australia Bank senior forex strategist Rodrigo Catril.
“Iran’s biggest customers have bowed down to US pressure and might still
work out exemptions or try to exploit loopholes to keep purchasing crude from
its longtime supplier.”
On currency markets high-yielding units were well bought. The Australian
dollar climbed one percent, South Korea’s won strengthened 0.6 percent and
the South African rand was 0.8 percent higher.
The pound dipped but held most of its gains after a report that British
Prime Minister Theresa May had reached a post-Brexit deal with Brussels
securing access to the EU for Britain’s key finance sector.
Sterling jumped almost two percent on the report despite London and
Brussels officials’ reservations.
– Key figures around 0300 GMT –
Tokyo – Nikkei 225: UP 1.2 percent at 21,954.61 (break)
Hong Kong – Hang Seng: UP 2.4 percent at 26,016.45
Shanghai – Composite: UP 1.2 percent at 2,637.43
Pound/dollar: DOWN at $1.2988 from $1.3004 at 2100 GMT
Euro/dollar: DOWN at $1.1395 from $1.1407
Dollar/yen: UP at 112.72 yen from 112.62 yen
Oil – West Texas Intermediate: DOWN 32 cents at $63.37 per barrel
Oil – Brent Crude: DOWN 29 cents at $72.60 per barrel
New York – Dow: UP 1.1 percent at 25,380.74 (close)
London – FTSE 100: DOWN 0.2 percent at 7,114.66 (close)
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