ZCZC
BCN-34
ASIA-MARKETS-UPDATE
Asian markets mostly drop after mixed lead from Wall St
HONG KONG, April 26, 2019 (BSS/AFP) – Asian markets mostly fell Friday
with investors treading carefully as global slowdown worries return to the
fore, with analysts pointing to an economic divergence between the US and the
rest of the world.
Traders have been cheered by a string of better-than-expected earnings from
corporate titans this reporting season, with Facebook, Microsoft and Amazon
adding to the positive mood on Wall Street, but unable to fuel broad gains.
However, there have been a couple of misses from other top firms, while a
series of downbeat data and central bank caution have dampened spirits.
Central banks in Japan, Sweden, Turkey and Ukraine, with an eye on the
global outlook, on Thursday took a dovish turn and flagged softer policy in
the near future. That came after a growth forecast cut by the Bank of Canada.
Meanwhile low inflation has led to speculation the Reserve Bank of
Australia could soon cut borrowing costs, while the European Central Bank is
battling weak eurozone growth.
On top of that, a drop in German business confidence fanned worries about
the bloc’s biggest economy, while South Korea saw its worst performance in 10
years during the first quarter.
But while the Federal Reserve has said it will not likely raise interest
rates this year the US economy continues to outpace its peers and the jobs
market is flourishing, with Wall Street hitting new records this week. Eyes
are now on the release of US growth data later Friday.
– ‘Ice water’ –
“While positive earning numbers have lent massive support to US equities,
it’s hard to ignore the inescapable fact that we are back to the divergent
economic narrative where the US economy is on fire while ice water continued
to pour over the rest of the globe,” said Stephen Innes of SPI Asset
Management.
Shanghai dropped 1.2 percent, extending losses of more than two percent
Thursday as investors fret that a run of market-supporting stimulus measures
aimed at supporting the economy could be coming to an end.
Tokyo ended down 0.2 percent and Seoul shed 0.5 percent, while there were
also losses in Taipei, Wellington and Bangkok. Singapore was flat.
But Hong Kong added 0.2 percent after suffering five straight days of
decline, while Sydney, Mumbai and Singapore edged up.
There was little reaction to soothing comments from Xi Jinping on trade, a
pledge to remove subsidies for Chinese firms and not keep the yuan
artificially low. Top Chinese and US negotiators resume negotiations next
week in Beijing aimed at ending their long-running trade war.
The broad losses for equities come at the end of a tough week for markets,
which have enjoyed a blockbuster start to the year, thanks to hopes for the
talks.
On oil markets both main contracts continued to fall after previously
hitting six-month highs, as traders await the response from OPEC and Russia
after the US said it would not extend waivers that allow certain countries to
buy crude from sanctions-hit Iran.
Observers said that after the jump in prices, selling was to be expected
owing to a number of factors including the China-US trade talks, unrest in
Libya, Venezuela’s political crisis and the OPEC-Russia output caps.
In early trade London fell 0.5 percent, Frankfurt was 0.2 percent off and
Paris edged down 0.1 percent.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 22,258.73 (close)
Hong Kong – Hang Seng: UP 0.2 percent at 29,605.01 (close)
Shanghai – Composite: DOWN 1.2 percent at 3,086.40 (close)
London – FTSE 100: DOWN 0.5 percent at 7,400.01
Euro/dollar: UP at $1.1144 from $1.1135 at 2100 GMT
Pound/dollar: UP at $1.2908 from $1.2891
Dollar/yen: UP at 111.65 yen from 111.61 yen
Oil – West Texas Intermediate: DOWN 31 cents at $64.90 per barrel
Oil – Brent Crude: DOWN 18 cents at $74.17 per barrel
New York – Dow: DOWN 0.5 percent at 26,495.56 (close)
BSS/AFP/HR/1450