HONG KONG, Nov 16, 2018 (BSS/AFP) – Asian markets mostly fluctuated Friday
as investors weighed China-US trade speculation, while the pound struggled to
recover from the previous day’s Brexit bruising.
But as a volatile week drew to a close, there did seem to be some
stability in the oil sector with the earlier sharp losses tailing off,
providing relief to regional energy firms.
Hopes that the world’s top two economies are making efforts to resolve
their painful tariffs standoff provided support to global markets, though
conflicting reports were keeping any optimism in check.
On Thursday it was reported that China had handed the US a number of trade
concessions as part of a move to smooth relations ahead of a G20 summit where
Donald Trump is expected to meet Chinese President Xi Jinping.
The Financial Times also said the two sides were stepping up efforts and
that US Trade Representative Robert Lighthizer had told business leaders the
next round of tariffs would be put on hold. While Lighthizer’s office denied
that, observers said the news still provided some hope.
“Maybe if we can get progress in trade relations, that could be a boost,”
Jason Browne, chief investment strategist at FundX Investment Group, told
Bloomberg News.
However, he added that “the benefits are likely to get offset from
expectations of continued (interest rate) hikes from the Fed”.
And Stephen Innes, head of Asia-Pacific trade at OANDA, said it appeared
the two sides were “looking to kick the can down the road until February to
resolve some significant differences”.
– Sterling volatility –
But he warned “the fear here is that this long and winding road to
compromise could be dotted with numerous pratfalls”.
In early trade, Hong Kong dropped 0.7 percent and Shanghai fell 0.3
percent, while Tokyo was off 0.5 percent by the break.
Sydney shed 0.2 percent but Singapore added 0.5 percent, Seoul gained 0.1
percent and Manila surged 1.8 percent. Taipei and Jakarta were also up.
Eyes were on the pound after it dropped like a stone Thursday in response
to the resignation of Dominic Raab, the man in charge of Britain’s Brexit
negotiations, who quit saying he did not agree with Prime Minister Theresa
May’s draft deal.
His resignation came with those of another key cabinet member and several
ministers just hours after May squeezed her hard-fought agreement through the
cabinet.
Sterling dropped from a high of $1.3072 Thursday to as low as $1.2724, and
has struggled to break back.
And while May has said she will fight on, speculation is swirling that she
could be ousted after leading Brexiteer MP Jacob Rees-Mogg formally called
for a vote of no confidence.
“Not surprising that in this fast-changing environment, sterling
volatility is the highest since the 2016 Brexit referendum,” said National
Australia Bank economist David de Garis.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.5 percent at 21,690.91 (break)
Hong Kong – Hang Seng: DOWN 0.7 percent at 25,916.78
Shanghai – Composite: DOWN 0.3 percent at 2,661.40
Pound/dollar: UP at $1.2789 from $1.2778 at 2200 GMT
Euro/pound: UP at 88.68 pence from 88.64 pence
Dollar/yen: DOWN at 113.40 yen from 113.62 yen
Euro/dollar: UP at $1.1337 from $1.1325
Oil – West Texas Intermediate: UP nine cents at $56.55
Oil – Brent Crude: UP seven cents at $66.69 per barrel
New York – Dow: UP 0.8 percent at 25,290.39 (close)
London – FTSE 100: UP 0.1 percent at 7,038.01 (close)