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Asian markets rise as US-China trade talks loom
HONG KONG, Feb 11, 2019 (BSS/AFP) – Asian stocks saw gains Monday as US
and Chinese officials in Beijing geared up for crunch trade talks aimed at
averting fresh tariff escalations.
Mainland Chinese markets reopened higher after the Lunar New Year break
despite a bleak IMF warning over global growth outlook, as efforts to resolve
the trade row get under way.
A slew of market-supporting measures intended to assist China’s slowing
economy also bolstered investor sentiment.
Top US economic officials will travel to the Chinese capital this week for
the third round of talks on Thursday and Friday, but deputies had already
arrived and the White House said preparatory discussions were due to begin
Monday.
Failure to agree a deal between the two economic superpowers before March
1 would see punitive US duties on $200 billion in Chinese goods more than
double.
“There’s a sense of urgency to this round,” said Jeffrey Halley, senior
market analyst at OANDA.
“If no deal is agreed by then, a belligerent President Trump and US
Congress will be more than willing to simply extend the trade war so China
will need to make the first move if they are to reach a detente,” he added.
Analysts say imposition of the tariffs could weaken the global economy.
Shanghai, reopening after a weeklong break, rose 1.4 percent. China has
introduced a series of piecemeal measures in recent weeks, and right up to
the Lunar New Year break, aimed at encouraging lending, supporting small and
medium-sized businesses, and spurring investment into stocks and bonds.
Hong Kong rose 0.7 percent, as Asian tech stocks tracked a small positive
lead on the Nasdaq Friday. Social media and gaming giant Tencent saw healthy
gains, along with smartphone component makers such as Sunny Optical
Technology and AAC Technologies.
Seoul edged up 0.2 percent, but Sydney shed 0.2 percent. Jakarta, Manila
and Singapore also posted losses. Tokyo was closed for a holiday.
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
– Storm clouds –
Meanwhile, the International Monetary Fund warned governments to prepare
for a possible economic “storm” as growth forecasts dip.
It cited the trade row as one of four “clouds” overshadowing the global
economy, along with Brexit uncertainty, the accelerated slowdown in China and
financial tightening.
“The bottom-line — we see an economy that is growing more slowly than we
had anticipated,” IMF managing director Christine Lagarde told the World
Government Summit in Dubai at the weekend.
But Europe’s stock markets shrugged off last week’s sharp losses to
rebound at the open. London gained 0.6 percent, Paris added 0.5 percent and
Frankfurt rose 0.5 percent.
Looming later this week is the spectre of a repeat of the 35-day partial
US government shutdown that ended January 25 — the longest in the country’s
history.
Key Republican negotiator Richard Shelby blamed Democrats for another
impasse over immigration, in talks that have been defined by Trump’s demand
for funds for a border wall.
Oil prices continued to tumble with growing oversupply fears linked to
record US shale output, with both main contracts posting losses.
– Key figures around 0810 GMT –
Hong Kong – Hang Seng: UP 0.7 percent at 28,143.84 (close)
Shanghai – Composite: UP 1.4 percent at 2,653.90 (close)
Tokyo – Nikkei 225: Closed for a public holiday
London – FTSE 100: UP 0.6 percent at 7,110.11
Euro/dollar: DOWN at $1.1314 from $1.1325 at 2200 GMT Friday
Dollar/yen: UP at 109.97 yen from 109.72 yen
Pound/dollar: DOWN at $1.2913 from $1.2937
Oil – West Texas Intermediate: DOWN 67 cents at $52.05 per barrel
Oil – Brent Crude: DOWN 37 cents at $61.73 per barrel
New York – Dow: DOWN 0.3 percent at 25,106.33 (close)
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