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Asian markets mostly higher as Shanghai extends rally
HONG KONG, March 6, 2019 (AFP) – A Shanghai rally led gains across most
Asian markets Wednesday as Chinese investors grow increasingly optimistic
over trade talks with the US.
With expectations that Washington and Beijing will eventually strike a
tariffs deal already baked into equity prices, analysts say officials will
need to provide some clarity on progress to give markets another step up.
There are also warnings that with optimism so high, there could be a lot
of disappointment if the final deal does not live up to the hype, or the two
sides fail to even reach an agreement.
The talk is that high-level negotiations are ongoing in order to pave the
way for a signing ceremony between Donald Trump and Xi Jinping later this
month.
“A mid-March meeting … remains the expected next step, but if trade
representatives are unable to agree on the final terms of implementation and
enforcement measures, we could see the trade truce rally fade,” said OANDA
senior market analyst Edward Moya.
Still, after a slow start Shanghai closed 1.6 percent higher to build on
Tuesday’s rally that came on the back of China’s decision to slash taxes and
ramp up spending, as leaders look to pep up the stuttering economy.
Mainland Chinese markets are up more than 20 percent this year thanks to
trade hopes and following a series of monetary easing measures to kickstart
economic growth, which hit its slowest pace in three decades in 2018.
– Slow growth hits Aussie –
Hong Kong rose 0.3 percent, while Sydney finished 0.8 percent higher after
data showed Australia’s economy virtually ground to a halt in October-
December owing to tepid household spending and a weakening housing market.
The news has fuelled speculation the central bank will have to cut already
record-low borrowing costs, cheering equity markets but sending the
Australian dollar tumbling about 0.6 percent against the greenback.
Elsewhere, Manila jumped 1.4 percent, Mumbai added 0.4 percent and Taipei
gained 0.5 percent, while Wellington edged up 0.2 percent.
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However, Tokyo ended down 0.6 percent, Singapore was off 0.1 percent and
Seoul fell 0.2 percent.
On currency markets the pound struggled to recover from losses against the
greenback after talks between British and EU negotiators failed to hammer out
a revised Brexit deal that Prime Minister Theresa May can pass through
parliament.
However, observers are optimistic an agreement can be reached and Britain
will not leave the bloc without a deal.
“Any deal that is agreed has a higher chance of getting voted through than
was the case in January when the deal was shot down by parliament,” said
James Hughes, chief market analyst at AxiTrader.
“Brexiteers fearful of Brexit being reversed could be more prone to back
May, provided she can get a legal concession” on customs on the Northern
Irish border.
In early trade London was flat, while Paris and Frankfurt each dipped 0.2
percent.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: DOWN 0.6 percent at 21,596.81 (close)
Hong Kong – Hang Seng: UP 0.3 percent at 29,037.60 (close)
Shanghai – Composite: UP 1.6 percent at 3,102.10 (close)
London – FTSE 100: FLAT at 7,182.77
Pound/dollar: DOWN at $1.3142 from $1.3176 at 2140 GMT
Euro/dollar: DOWN at $1.1297 from $1.1308
Dollar/yen: DOWN at 111.78 yen from 111.88 yen
Oil – West Texas Intermediate: DOWN 39 cents at $56.17 per barrel
Oil – Brent Crude: DOWN 36 cents at $65.50 per barrel
New York – Dow: DOWN 0.1 percent at 25,806.63 (close)
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