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ASIA-MARKETS-UPDATE
Asian markets mostly up as dealers await Fed, sterling flat
HONG KONG, July 24, 2019 (BSS/AFP) – Most Asian markets enjoyed another
day of gains Wednesday, with support coming from more healthy earnings
results and renewed hopes for a resolution of the China-US trade war.
The pound was barely moved after Tuesday’s brief rally in reaction to
Boris Johnson’s election to replace Theresa May as British prime minister,
with investors keen to see whether the leading Brexiter pushes ahead with a
no-deal divorce from the European Union.
While Federal Reserve officials are blocked from speaking on policy ahead
of a crucial meeting next week, their decision on how far to cut interest
rates is the big question on trading floors.
However, investors are still keeping an eye on the corporate reporting
season, which has been broadly positive.
The latest big-name firms to post positive results were Coca-Cola,
toymaker Hasbro and Harley-Davidson, helping all three main indexes on Wall
Street end with sharp gains.
Adding to the upbeat mood were reports that US President Donald Trump’s
Trade Representative Robert Lighthizer will lead a delegation to China next
week to resume trade talks.
The meeting would be the first head-to-head since negotiations were cut
short in May by Trump’s surprise decision to hit China with more tariffs for
what he called Beijing’s backsliding.
Since then, he has met Chinese leader Xi Jinping on the sidelines of the
G20 in Japan, where they agreed to get both sides back to the table.
– Johnson’s ‘do or die’ –
But Vanguard Markets’ Stephen Innes said: “While the trade conversation
remains high on the list of supportive factors for equity market this week,
investors’ risk barometers are completely dialled in on the amplitude of the
US Federal Reserve’s next easing cycle as the looser the policy, the higher
equity markets will soar.”
Hong Kong gained 0.2 percent and Shanghai finished 0.8 percent higher,
while Tokyo ended up 0.4 percent.
Sydney gained 0.8 percent and Singapore put on 0.1 percent while Bangkok
was also higher.
MORE/HR/1450
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
But Taipei slipped 0.1 percent and Mumbai shed 0.6 percent.
Seoul was down 0.9 percent with market heavyweights Samsung and SK Hynix
both sharply lower on worries about the impact of the simmering trade row
with Japan that threatens to hit South Korea’s crucial tech industry.
In early trade, London dipped 0.3 percent but Frankfurt and Paris each put
on 0.1 percent.
There was little reaction to the International Monetary Fund’s decision to
lower its global growth forecast for this year and next owing to trade
tensions, economic uncertainty and rising prospects for a no-deal Brexit. The
Fund said the world faced a “precarious” 2020.
On currency markets, the pound remained stuck around two-year lows against
the dollar after Johnson’s expected leadership win, which means he will be
appointed prime minister later Wednesday.
“Boris Johnson has vowed to deliver Brexit by the October 31 deadline, ‘do
or die’,” said Quentin Fitzsimmons, an asset manager at T. Rowe Price, adding
this would be a tough ask as he comes up against the same problems that
befell Theresa May.
“The UK parliament has rejected the withdrawal agreement that May struck
with the European Union, the EU has stated firmly that it will not
renegotiate that agreement, and the majority of members of parliament remain
opposed to the UK leaving the EU without a deal being agreed upon.”
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: UP 0.4 percent at 21,709.57 (close)
Hong Kong – Hang Seng: UP 0.2 percent at 28,524.04 (close)
Shanghai – Composite: UP 0.8 percent at 2,923.28 (close)
London – FTSE 100: DOWN 0.3 percent at 7,538.10
Pound/dollar: UP at $1.2440 from $1.2437 at 2050 GMT
Euro/pound: UP at 89.65 pence from 89.62 pence
Euro/dollar: FLAT at $1.1148
Dollar/yen: DOWN at 108.05 yen from 108.22 yen
West Texas Intermediate: UP 30 cents at $57.07 per barrel
Brent North Sea crude: UP 23 cents at $64.06 per barrel
New York – Dow: UP 0.7 percent at 27,349.19 (close)
BSS/AFP/HR/1452