ZCZC
BCN-33
ASIA-MARKETS-UPDATE
Asian markets retreat as crunch G20 gets under way
HONG KONG, June 28, 2019 (BSS/AFP) – Asian markets fell on Friday as
investors keep a nervous watch on developments in the G20 summit, with trade
top of the agenda and a key focus on the much-anticipated meeting between
Donald Trump and Xi Jinping.
Equities have enjoyed a largely positive couple of weeks on hopes for
progress in the head-to-head between the leaders of the world’s top two
economies, though the possibility of failure continues to make dealers
nervous.
As heads of the 20 leading economies started the summit in Osaka, Trump
said he was hopeful for Saturday’s talks with Xi, saying “I think it will be
productive”, adding that “it will be a very exciting day”.
Traders were biding their time, pushing regional markets lower, with
Shanghai ending down 0.6 percent while Tokyo and Hong Kong were each off 0.3
percent.
Sydney shed 0.7 percent, Singapore and Seoul slipped 0.2 percent apiece,
while Taipei, Manila and Mumbai were also down, though Wellington and Jakarta
edged up.
In early trade London added 0.1 percent, Paris was flat and Frankfurt rose
0.4 percent.
While most observers are not expecting a final deal to come out of the
Trump-Xi talks, the broad consensus is for some sort of agreement to press on
with negotiations, which stalled last month when the US president hiked
tariffs on some Chinese goods.
“The Trump-Xi meeting at the G20 is front and centre,” said Neil Wilson,
chief market analyst at Markets.com.
“I would think that for Trump and Xi to agree to delay the additional
tariffs and for detailed talks to resume would be sufficient to leave
investors happy that things are moving, albeit simply kicking the can down
the road a little longer so it’s closer to the 2020 White House election for
Trump.”
But there remains some uncertainty about how the meeting will go, with the
Wall Street Journal reporting that Xi plans to demand the US reverse a ban on
doing business with Huawei as a condition for kickstarting talks.
The White House, however, said there were “no preconditions to these
talks”.
MORE/HR/1448
ZCZC
BCN-34
ASIA-MARKETS-UPDATE 2 LAST HONG KONG
– ‘Cautiously optimistic’ –
Hannah Anderson, JP Morgan Asset Management global market strategist, was
also cautious.
“We have watched this movie before: China and the US talk, leaks from
policymakers on both sides encourage speculation we are close to a deal,
things fall apart, the US presses forward with higher tariffs and markets
express their displeasure with corrections and higher volatility.”
While the China-US trade row is the major issue, Trump’s spats with Japan
and India over tariffs are also in focus.
Earlier Friday the US president said he expected some “very big” deals
with the two countries, both of which he has previously blasted for what he
calls unfair levies.
Oil prices were slightly lower but remain supported by this week’s
surprise jump in US stockpiles and tensions in the Middle East, while dealers
are awaiting next week’s meeting of OPEC and other top producers led by
Russia, where they will decide on the future of their output cap.
“Expectations going into the weekend are looking cautiously optimistic for
higher oil prices,” said OANDA senior market analyst Edward Moya.
“While some of the rhetoric on Chinese demands on Huawei and Trump’s
unpredictability have many sceptical… both sides have political motivations
to wrap up a trade deal by the fall and that would require a resumption of a
constructive dialogue,” he said.
“Russia is likely to play ball (over the output caps) as they seek to
secure further investment and trade deals with the Saudis.”
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: DOWN 0.3 percent at 21,275.92 (close)
Hong Kong – Hang Seng: DOWN 0.3 percent at 28,542.62 (close)
Shanghai – Composite: DOWN 0.6 percent at 2,978.88 (close)
London – FTSE 100: UP 0.1 percent at 7,411.99
Euro/dollar: UP at $1.1386 from $1.1370 at 2050 GMT
Pound/dollar: UP at $1.2670 from $1.2669
Dollar/yen: DOWN at 107.63 yen from 107.78 yen
West Texas Intermediate: DOWN 28 cents at $59.15 per barrel
Brent North Sea crude: DOWN 41 cents at $66.14 per barrel
Bitcoin – UP at $11,401 from $10,305
New York – Dow: FLAT at 26,526.58 (close)
BSS/AFP/HR/1450