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ASIA-MARKETS-UPDATE
Asia markets reverse gains as trade war fears persist
HONG KONG, Aug 9, 2019 (BSS/AFP) – Asian markets largely reversed early
gains Friday from a bargain-hunting push as investors remained cautious over
the intensifying US-China trade war.
Tokyo managed to hold on to its winnings as positive data helped drive the
Nikkei up 0.4 percent, after figures showed the world’s third-biggest economy
was growing faster than analysts had predicted.
The data showed Japan’s gross domestic product grew 0.4 percent from the
previous quarter on robust consumer demand, beating analysts’ median forecast
of 0.1 percent.
“The reading of the data itself was not a huge buying peg… but
nonetheless it confirmed personal spending could pick up,” said Makoto
Sengoku, market analyst at the Tokai Tokyo Research Institute.
Shanghai shed 0.7 percent on news of the United States banning Huawei and
other Chinese firms from government contracts, and weak economic data showing
sluggish demand.
Hong Kong lost 0.7 percent as did Manila. Singapore and Bangkok were also
down, but Sydney edged up 0.3 percent and Seoul climbed 0.9 percent.
European markets, which had advanced on bargain-hunting by investors after
several days of losses, fell in early trade, with London down 0.3 percent.
Frankfurt dropped 0.5 percent and Paris slid 0.4 percent.
Safe-haven assets such as bonds, gold and the yen remained in demand,
signalling that trade war fears were continuing to weigh on markets.
Interest rate cuts by central banks in India, Thailand and New Zealand
this week underscored investor anxiety, with analysts saying markets believe
further cuts are in the offing.
“The current market dynamics are such that the stabilisation of risk
assets will remain a function of improvement on the trade front or the Fed
turning increasingly more dovish,” said Stephen Innes at VM Markets.
“With a near term trade agreement little more (than) wishful thinking at
this stage the markets will lean on the dovish Fed narrative again as a
critical circuit breaker to diffuse the markets’ stress overload from
escalating trade and currency war tensions.”
MORE/HR/1500
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
– Currency war worries –
Equities were hammered Monday after Beijing allowed the yuan to slide
sharply against the dollar following President Donald Trump’s announcement of
fresh tariffs on Chinese goods starting September 1.
But Beijing’s push to stabilise the yuan helped to ease fears of a full-
blown currency war on top of an escalating trade war.
That has done little to placate Trump, however, with Washington formally
branding China a currency manipulator earlier in the week.
On Thursday, he appeared to call for a weaker US dollar to help American
exporters — a move that breaks with decades of US policy.
“As your President, one would think that I would be thrilled with our very
strong dollar. I am not!” he said on Twitter.
“The Fed’s high interest rate level, in comparison to other countries, is
keeping the dollar high, making it more difficult for our great
manufacturers… to compete on a level playing field.”
– Key figures around 0800 GMT –
Tokyo – Nikkei 225: UP 0.4 percent at 20,684.82 (close)
Hong Kong – Hang Seng: DOWN 0.7 percent at 25,939.30 (close)
Shanghai – Composite: DOWN 0.7 percent at 2,774.75 (close)
London – FTSE 100: DOWN 0.3 percent at 7,261.61
Pound/dollar: DOWN at $1.2117 from $1.2138 around 2100 GMT
Euro/pound: UP at 92.25 pence from 92.12 pence
Euro/dollar: UP at $1.1187 from $1.1182
Dollar/yen: DOWN at 105.97 yen from 106.06 yen
Brent North Sea crude: UP nine cents at $57.47 per barrel
West Texas Intermediate: UP 10 cents at $52.64 per barrel
New York – Dow: UP 1.4 percent at 26,378.19 (close)
BSS/XINHUA/HR/1500