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Asian markets mostly up as eyes turn to Trump-Xi talks
HONG KONG, Nov 26, 2018 (BSS/AFP) – Most Asian markets rose Monday as
investors tentatively pick up cheap stocks, with focus on an expected meeting
between Donald Trump and Xi Jinping at the weekend that will be watched for
signs of a softening in the China-US trade war.
The broad gains came despite more hefty selling in energy firms after
another collapse in oil prices on Friday, while the pound was flat against
the dollar after European Union leaders approved a Brexit deal but which must
be cleared by British MPs who mostly oppose it.
The positive mood comes at the start of a key week that sees a speech by
Federal Reserve boss Jerome Powell and the release of the bank’s last policy
meeting minutes, before culminating in the G20 in Buenos Aires.
While the summit will focus on several global issues, the meeting between
Trump and Xi will get the most attention with the economic superpowers
engaged in a trade war just as global growth starts to stutter.
But expectations for a deal to end the standoff are low.
“It would seem that President Xi and President Trump have every incentive
to come to an agreement on trade issues, even if that agreement does not
significantly change the status quo,” said JP Morgan Asset Management chief
global strategist David Kelly.
“However, perceptions are important on both sides. While some hold out the
hope that an agreement in principle will be reached, it seems more likely
that an agreement will have to wait for more posturing on both sides.”
Stephen Innes, head of Asia-Pacific trade at OANDA, called the meeting
“possibly the best and last opportunity for the two leaders to share middle
ground”.
“The big question is are we going to see Trump the ‘deal maker’ or Trump
the ‘trade warrior’ who wants China to ‘feel more pain’? Keeping in mind that
betting against the latter has been a poor bet for traders this year.”
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– Crude woes –
Still, the week has started on an upbeat note with Hong Kong jumping 1.5
percent and Shanghai 0.4 percent higher, while Tokyo went into the break 0.8
percent higher.
Singapore added 0.6 percent, Seoul and Taipei each jumped more than one
percent, and Manila gained 0.6 percent.
However, Wellington and Sydney both declined.
Oil prices edged up slightly but remain well beaten down after Friday’s
hammering, which saw WTI sink 7.7 percent and Brent more than six percent,
putting them at lows not seen for more than a year.
The commodity has plunged by about a third from its four-year highs
touched at the start of October owing to a range of issues, including a
global slowdown, the trade row, rising supplies, softer-than-expected US
sanctions on Iran, a stuttering China and strong dollar.
The retreat comes ahead of a meeting of the Organization of the Petroleum
Exporting Countries on December 6.
“At the root of the oil market woes, there is too much supply and too
little demand,” said Innes. “But much of the near term price recovery will be
driven by what happens in G20 in Buenos Aires and at the OPEC summit in
Vienna a week later.”
The losses in crude prices have battered energy firms over the past two
months, and they continued to fall Monday.
Hong Kong-listed PetroChina fell 1.5 percent, while Sinopec was one
percent off. Inpex dropped 2.9 percent in Tokyo and Woodside Petroleum sank
2.2 percent in Sydney.
On currency markets, the pound was barely moved against the dollar as
British Prime Minister Theresa May faces an uphill struggle pushing through
her draft Brexit deal, with MPs on both sides against it.
May has staked her political future on the agreement and failure would
likely lead to the toppling of her government, fuelling fresh uncertainty and
hitting the sterling.
EU leaders have said the deal is the best possible one Britain could hope
for, meaning a rejection of it will more than likely see the country crash
out of the bloc.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.8 percent at 21,815.55 (break)
Hong Kong – Hang Seng: UP 1.5 percent at 26,314.63
Shanghai – Composite: UP 0.4 percent at 2,590.89
Pound/dollar: UP at $1.2810 from $1.2805 at 1930 GMT Friday
Euro/dollar: UP at $1.1333 from $1.1331
Dollar/yen: UP at 113.07 yen from 112.85 yen
Oil – West Texas Intermediate: UP 40 cents at $50.82 per barrel
Oil – Brent Crude: UP 67 cents at $59.47 per barrel
New York – Dow Jones: DOWN 0.7 percent at 24,285.95 (close)
London – FTSE 100: DOWN 0.1 percent at 6,952.86 (close)
BSS/AFP/HR/0925