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Asian markets mixed as investors track trade talks, shutdown
HONG KONG, Jan 24, 2019 (BSS/AFP) – Asian investors trod cautiously
Thursday as they try to ascertain the state of play in the China-US trade
row, while the pound edged higher on growing optimism Britain will not crash
out of the European Union.
The long-running US government shutdown continued to rankle, with
Democrats and Donald Trump digging their heels in over the president’s border
wall budget demand, while a White House official warned it could hammer the
world’s top economy.
For a second day equities swung to and fro, with few solid catalysts to
drive trade, though Wall Street provided a positive lead as all three main
indexes ended higher following upbeat earnings from the likes of market
titans Procter & Gamble and IBM.
In early trade Hong Kong was down 0.1 percent and Shanghai slipped 0.3
percent while Tokyo ended the morning 0.4 percent lower.
Sydney was 0.1 percent off and Seoul edged up 0.2 percent while Singapore
added 0.3 percent and Wellington eased 0.1 percent. Taipei, Manila and
Jakarta edged up.
Trump on Wednesday gave an upbeat assessment of the state of affairs in
the trade stand-off, saying “we’re doing very well in the negotiations” and
that China “wants to make a deal”.
However, dealers will take the remarks in their stride in a week that has
seen the White House deny Financial Times and CNBC reports that officials had
rejected Beijing’s offer of preparatory discussions ahead of next’s high-
level talks in Washington.
Earlier Bloomberg said the two sides were struggling to see eye to eye on
the delicate issue of intellectual property.
– ‘Very close to zero’ –
The talks come as China struggles to reinvigorate its economy, which is
growing at its weakest pace in almost three decades, while Trump is face an
increasingly bitter government shutdown just as the presidential campaign
season gets into gear.
The impact of the shutdown — with Democrats refusing to provide Trump
billions for his Mexico border wall — was laid out by the head of the White
House Council of Economic Advisers, who warned the economy could grow “very
close to zero” if it continued through March.
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But Kevin Hassett said there would likely be a massive rebound as soon as
the stand-off ended.
There seems no end in sight, with Trump hitting out at House Speaker Nancy
Pelosi after she disinvited him from the chamber for his upcoming State of
the Union speech citing security worries while parts of the government are
not working.
The pound edged up and is holding at two-month highs against the dollar,
supported by a belief that Britain will not exit the EU without a deal,
despite Prime Minister Theresa May’s controversial agreement being soundly
defeated by MPs last week.
Traders are increasingly “convinced that the ‘worst’ that might happen on
Brexit is that May’s previously doomed Withdrawal Agreement might actually
get over the line if the ‘hard Brexiteers’ in her government become convinced
that the alternative is a (delay in leaving), a second referendum and
potentially no Brexit”, said National Australia Bank Ray Attrill.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.4 percent at 20,506.81 (break)
Hong Kong – Hang Seng: DOWN 0.1 percent at 26,970.89
Shanghai – Composite: DOWN 0.3 percent at 2,574.38
Pound/dollar: UP at $1.3088 from $1.3068
Euro/dollar: UP at $1.1389 from $1.1383 at 2200 GMT
Dollar/yen: DOWN at 109.55 yen from 109.60
Oil – West Texas Intermediate: DOWN seven cents at $52.55 per barrel
Oil – Brent Crude: DOWN four cents at $61.10 per barrel
New York – DOW: UP 0.7 percent at 24,575.62 (close)
London – FTSE 100: DOWN 0.9 percent at 6,842.88 (close)
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