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Asian markets rise as reports boost hopes for trade deal
HONG KONG, March 4, 2019 (BSS/AFP) – Asian markets mostly rose Monday on
growing optimism for a trade deal between China and the United States after
reports said the two sides were close to a breakthrough.
With a busy week of data releases and events coming up, investors got off
to a positive start as they cheered stories saying the tariffs stand-off
between world’s top two economies that has dragged on global growth could
soon be resolved.
The Wall Street Journal said negotiations last month had narrowed key
differences and an agreement could be ready for signing at a summit between
Donald Trump and Xi Jinping in late March.
The newspaper, as well as Bloomberg News, also said Beijing had
tentatively agreed to lower tariffs or ease certain restrictions, work
quicker to open up its auto market and increase its purchases of US goods.
In exchange for Chinese concessions, Washington would do away with most of
the trade sanctions it imposed last year, the reports said.
Shanghai rose 1.1 percent, while Hong Kong put on 0.5 percent and Tokyo
ended one percent higher.
Sydney rose 0.4 percent and Singapore 0.8 percent, while Wellington added
0.7 percent and Manila 0.6 percent.
However, Seoul edged down 0.2 percent while Taipei slipped 0.4 percent.
– ‘Much-needed lift’ –
Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset
Management, said that while there were a number of hurdles to a final
agreement such as on intellectual property rights, traders were broadly
confident.
“Investors are fully aware of these long-term challenges, but a more
sustained ceasefire on tariffs will help to reduce business uncertainty. This
could provide a much-needed lift to business sentiment and improve growth
momentum entering the summer,” he said.
But there were also warnings that investors could be left disappointed.
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“With all this positivity comes the risk that the market is buying on this
rumour mill and is becoming more exposed should the good news not
materialise,” said Neil Wilson, chief market analyst at Markets.com. “March
could well come in like a lion and go out like a lamb.”
Focus turns Tuesday to the start of China’s annual National People’s
Congress where it will unveil its growth forecast for this year, while
dealers will be looking for any measures to stimulate the stuttering economy.
An official in Beijing said Monday that the rubber-stamp legislature will
vote next week on a bill that will bring “a fundamental change” for foreign
investors, which could help ease trade tensions with the US.
This week also sees the release of Chinese trade data and key US jobs
figures, which will provide a fresh look at the state of the US economy and
the Federal Reserve’s monetary policy plans.
On currency markets the dollar extended gains against the safe-haven yen
as dealers became more confident, while the greenback was down against most
high-yielding units including the Australian dollar, South African rand and
Thai baht. China’s yuan was holding around eight-month highs.
Adding to dollar weakness were comments from Trump hitting out at a strong
currency.
“I want a strong dollar but I want a dollar that does great for our
country, not a dollar that’s so strong that it makes it prohibitive for us to
do business with other nations and take their business,” he said during a
speech at the Conservative Political Action Conference in Maryland on
Saturday, according to Bloomberg News.
In early trade London rose 0.3 percent, Frankfurt gained 0.4 percent and
Paris put on 0.5 percent.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: UP 1.0 percent at 21,822.04 (close)
Hong Kong – Hang Seng: UP 0.5 percent at 28,959.59 (close)
Shanghai – Composite: UP 1.1 percent at 3,027.58 (close)
London – FTSE 100: UP 0.3 percent at 7,127.89
Euro/dollar: DOWN at $1.1364 from $1.1366 at 2140 GMT on Friday
Pound/dollar: UP at $1.3233 from $1.3208
Dollar/yen: UP at 111.97 yen from 111.92 yen
Oil – West Texas Intermediate: UP 23 cents at $56.03 per barrel
Oil – Brent Crude: UP 27 cents at $65.34 per barrel
New York – Dow: UP 0.4 percent at 26,026.32 (close)
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