HONG KONG, Jan 17, 2019 (BSS/AFP) – Asian markets were mixed Thursday as
renewed concerns about China-US tensions overshadowed a positive lead from
Wall Street following a better-than-expected round of corporate earnings.
The pound extended gains against the dollar after Prime Minister Theresa
May survived a no-confidence vote as she prepares to draw up new proposals to
leave the European Union that is palatable to a majority of MPs.
After a tumultuous December, global equities have enjoyed a broadly strong
start to the year, largely thanks optimism China and the US will resolve
their trade row.
But confidence took a knock Wednesday from a report that said US officials
were carrying out a criminal probe into Chinese tech giant Huawei and could
soon indict the firm over allegations of theft of trade secrets from its US
business partners.
Lawmakers have also introduced a bill to ban the export of American parts
and components to Chinese telecom companies that are in violation of US
export control or sanctions laws — with Huawei and fellow Chinese firm ZTE
the likely targets.
“Huawei is effectively an intelligence-gathering arm of the Chinese
Communist Party whose founder and CEO was an engineer for the People’s
Liberation Army,” said Republican Senator Tom Cotton, one of the bill’s
sponsors.
The developments follow the arrest last year in Canada of Huawei’s chief
financial officer Meng Wanzhou, who is the daughter of the company founder
and faces extradition to the US on Iran-linked fraud charges.
It also muddies the waters in trade talks between Beijing and Washington,
which looked to be on a positive course after officials held three days of
talks earlier this month, with both sides seemingly upbeat.
– Cost of US shutdown –
In early trade Hong Kong eased 0.1 percent and Shanghai shed 0.3 percent
while Tokyo was down 0.2 percent by the break and Singapore slipped 0.4
percent.
But Sydney edged up 0.1 percent while Seoul put on 0.2 percent with Taipei,
Wellington, Manila and Jakarta also in positive territory.
On Wall Street all three main indexes closed with gains after earnings
reports from Bank of America and Goldman Sachs that overshot forecasts, while
executives said they were confident the US economy was in rude health.
The Federal Reserve’s closely followed “Beige Book” report pointed out that
while political and trade uncertainty was weighing on business confidence,
growth was continuing at a modest pace in most of the country.
However, there are increasing worries about the impact of the US government
shutdown as it moves towards a fifth week, with Oxford Economics estimating
it is slashing growth by $700 million a week.
On currency markets the pound edged up against the dollar with dealers
optimistic that Britain will not leave the EU without a deal in place,
despite May’s exit plan being thrown out by MPs Tuesday.
On Wednesday she survived a no-confidence vote and is now planning her next
move, with speculation swirling that the March 29 date for leaving will be
delayed or another referendum will be called.
“Nothing has happened in the last 24 hours to dissuade us from the view
that we are headed in the direction of an (exit) delay, softer Brexit… or
no Brexit,” said National Australia Bank strategist Ray Attrill.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 20,402.36 (break)
Hong Kong – Hang Seng: DOWN 0.1 percent at 26,881.22
Shanghai – Composite: DOWN 0.3 percent at 2,563.16
Pound/dollar: UP at $1.2886 from $1.2877 at 2140 GMT
Euro/dollar: UP at $1.1400 from $1.1395
Dollar/yen: DOWN at 108.95 yen from 109.05
Oil – West Texas Intermediate: DOWN 20 cents at $52.11 per barrel
Oil – Brent Crude: DOWN 22 cents at $61.10 per barrel
New York – DOW: UP 0.6 percent at 24,207.16 (close)
London – FTSE 100: DOWN 0.5 percent at 6,858.16 (close)