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ASIA-MARKETS-UPDATE
Asian markets extend gains as optimism slowly returns
HONG KONG, Sept 11, 2019 (BSS/AFP) – Asian markets mostly rose Wednesday
with a broadly upbeat tone across trading floors ahead of major meetings at
the European and US central banks, while there is also a growing sense of
optimism over China-US trade talks.
News that Donald Trump had fired his fervently hawkish national security
adviser also lifted sentiment with analysts saying it could see the White
House take a less strident approach and ease geopolitical tensions.
With the global economy stuttering, attention has turned increasingly to
central banks as investors look for more stimulus.
On Thursday the European Central Bank holds one of its most anticipated
gatherings and hopes are for a series of fresh measures including a possible
interest rate cut, fresh bond-buying quantitative easing (QE) or other
loosening tools.
That is followed by the Federal Reserve’s board meeting next week, where it
is tipped to announce another reduction in borrowing costs as the world’s top
economy — which has so far been the strongest globally — stutters.
“With the expectation of the resumption of quantitative easing by the
ECB… and a rate cut by the Federal Reserve next week, the risk environment
has solidified and tempted investors out of hiding from the bond markets and
back into equities,” said Jeffrey Halley, senior market analyst at OANDA.
In afternoon trade Hong Kong climbed 1.6 percent as investors made the most
of the upbeat mood to pick up cheap stocks after months of sometimes violent
protests in the city weighed on the stock market.
Tokyo finished one percent higher, Singapore put on more than one percent,
Seoul rose 0.8 percent, Sydney gained 0.4 percent and Taipei added 0.3
percent, while Manila, Mumbai, Bangkok and Jakarta also posted gains.
However, Shanghai was fell 0.4 percent, with little major reaction to news
that China had listed 16 US categories of goods it would exempt from tariffs,
ahead of planned top-level trade talks next month. Dealers also appeared to
brush off Beijing’s decision Tuesday to lift limits on foreign investment in
the country.
MORE/HR/1500
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
Wellington tumbled almost two percent as Prime Minister Jacinda Ardern’s
government was rocked by its handling of sexual assault allegations against a
top Labour Party staffer.
In early trade London rose 0.5 percent, Frankfurt jumped 0.6 percent and
Paris edged up 0.3 percent.
– Lower war-risk premium –
Trump’s decision to sack John Bolton as leading security adviser raised the
possibility of an easing of tensions between the US and several nations,
particularly Iran.
The controversial Bolton was closely linked to the invasion of Iraq and
other past aggressive US foreign policy decisions, and was seen as one of the
main driving forces in Trump’s muscular approach to Tehran, North Korea and
Venezuela, among others.
Stephen Innes at AxiTrader said that while the move did not necessarily
mean a huge change in policy direction, “it does eliminate the most vocal
advocate for US military-enforced regime change in the Trump administration”.
He added that “from a geopolitical risk perspective, it does lessen war
risk premiums, especially in Syria, Venezuela, and Iran and opens the door to
more friendly discussion with North Korea”.
However, the possibility of a dialling down in the stand-off between the US
and Iran led to a plunge Tuesday in the price of oil, with WTI diving almost
three percent from an intraday high and Brent shedding 2.5 percent.
The two contracts later clawed back some of the losses on bargain-buying
expectations for more output cuts by leading producers led by Saudi Arabia.
In share trading companies linked to Apple enjoyed healthy buying after the
US tech giant unveiled new iPhones, including a lower-priced offering, and
set launch dates for its original video offering as well as its game
subscription service.
In Tokyo, Alps Alpine surged three percent, Japan Display put on nearly
three percent and Sharp rallied more than four percent, while LG Display in
Seoul was up two percent in Seoul. Taipei-listed Foxconn rose 0.2 percent.
On forex markets the positive vibe helped the dollar up against the safe-
haven yen, while higher-yielding, riskier currencies edged up against the
greenback.
The pound held its recent gains as Prime Minister Boris Johnson said he was
pushing to strike a divorce agreement with the European Union, having lost a
series of key votes to MPs opposed to a no-deal Brexit.
– Key figures around 0720 GMT –
Tokyo – Nikkei 225: UP 1.0 percent at 21,597.76 (close)
Hong Kong – Hang Seng: UP 1.6 percent at 27,111.11
Shanghai – Composite: DOWN 0.4 percent at 3,008.81 (close)
London – FTSE 100: UP 0.5 percent at 7,303.41
Pound/dollar: UP at $1.2362 from $1.2357 at 2050 GMT
Euro/pound: UP at 89.38 pence from 89.37 pence
Euro/dollar: UP at $1.1045 from $1.1042
Dollar/yen: UP at 107.76 yen from 107.53 yen
West Texas Intermediate: UP 35 cents at $57.75 per barrel
Brent North Sea crude: UP 40 cents at $62.78 per barrel
New York – Dow: DOWN 0.3 percent at 26,909.43 (close)
BSS/AFP/HR/1500