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Asian markets mixed as traders prepare for crucial week
HONG KONG, Jan 28, 2019 (BSS/AFP) – Asian markets were mixed Monday as
investors look ahead to a week chock-full of crucial events, including high-
level trade talks between China and the United States.
Hopes that a deal can be struck between the world’s top two economies have
helped fuel a rally this month in global equities, which had been hammered in
December.
While there have been conflicting reports on the likelihood of an
agreement to end the trade war, analysts say it is in the interests of both
sides to reach a deal, with China’s economy stuttering and President Donald
Trump gearing up for his re-election campaign.
“Although coming to an agreement is still tricky, both sides have little
incentive to escalate tensions,” said Tai Hui, chief market strategist for
Asia-Pacific at JP Morgan Asset Management.
“Markets will at least expect an extension of the truce in tariff
increases beyond early March, while more difficult issues are still being
worked on by both sides.”
As well as the Wednesday-Thursday meeting in Washington, dealers also have
in their sights the Federal Reserve’s latest policy meeting, where the
central bank’s statement will be pored over for an idea about its interest
rate plans.
Also coming up is the release of US jobs and economic growth data, Chinese
manufacturing activity results, another vote on Prime Minister Theresa May’s
Brexit deal and a number of big-name earnings, including from Apple, Samsung,
Facebook and Alibaba.
After starting the day on a positive note regional markets went south as
investors contemplate what the week has in store, while China released
another batch of disappointing data showing profits at the country’s
industrial firms fell in December.
Shanghai ended down 0.2 percent while Hong Kong was flat and Tokyo dropped
0.6 percent. Singapore skidded 0.1 percent, while Seoul was marginally lower
and Mumbai dropped 0.9 percent.
However, Manila rose 0.3 percent, Taipei put on 0.4 percent and there were
also gains in Wellington and Bangkok.
In early trade London dipped 0.2 percent, Paris shed 0.5 percent and
Frankfurt lost 0.3 percent.
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
– Fragile shutdown truce –
Wall Street provided a positive lead after another batch of upbeat
earnings reports, though observers said there was little major reaction to
news that Trump had agreed to re-open the government after public services
started to buckle in the longest-ever shutdown.
However, the deal that will see 800,000 workers finally get paid will only
last a week and did nothing to resolve the row over the president’s demand
for billions of dollars to pay for a Mexican border wall.
“While Democrats appeared to have won this battle, the government is only
opened until February 15th, and this band-aid will have trouble leading to a
permanent solution as both sides are nowhere near a bending on (their)
positions,” said OANDA market analyst Edward Moya.
The pound dipped but was holding up against the dollar ahead of Tuesday’s
vote on May’s revised Brexit deal, with many believing that even if it is
kicked out by MPs, Britain will still not leave the European Union without an
agreement.
There is a growing sense that May will seek a delay in the country’s
leaving date to give her more time to reach a deal.
“The pound has made some decent gains over the past few weeks on the basis
that a ‘no deal’ Brexit seems a much more distant prospect,” Michael Hewson,
chief market analyst at CMC Markets, said in a note.
“A lot of this still seems more like wishful thinking than anything else,
given the parliamentary arithmetic, as well as the politics. Markets seem to
have a lot more faith in politicians than many think they deserve.”
Hong Kong-listed Russian aluminium giant Rusal jumped 9.4 percent after
the US Treasury Department lifted sanctions on it and two related companies
after blacklisted billionaire Oleg Deripaska took action to sharply cut his
stake in them.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: DOWN 0.6 percent at 20,649.00 (close)
Hong Kong – Hang Seng: FLAT at 27,576.96 (close)
Shanghai – Composite: DOWN 0.2 percent at 2,596.98 (close)
London – FTSE 100: DOWN 0.2 percent at 6,793.69
Euro/dollar: DOWN at $1.1408 from $1.1413 at 2130 GMT Friday
Pound/dollar: DOWN at $1.3176 from $1.3200
Dollar/yen: DOWN at 109.34 yen from 109.48
Oil – West Texas Intermediate: DOWN 74 cents at $52.95 per barrel
Oil – Brent Crude: DOWN 75 cents at $60.89 per barrel
New York – Dow: UP 0.8 percent at 24,737.20 (close)
BSS/AFP/HR/1444