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Asian markets rally on fresh trade hope, elections lift Hong Kong
HONG KONG, Nov 25, 2019 (BSS/AFP) – Asian markets rose Monday on fresh
optimism over the long-running China-US trade talks after Beijing offered an
olive branch on the key issue of intellectual property, while Donald Trump
hailed progress on the agreement.
Hong Kong stocks led the regional advance with pro-democracy parties
winning a landslide in local elections that could put pressure on the city’s
government and Beijing to act after months of protests that have hobbled the
financial hub’s economy and transport.
The week got off to a strong start after China said at the weekend it
would hike penalties on violations of intellectual property rights while also
look at reducing the thresholds for criminal punishments of those who steal
IP.
The IP issue is a major sticking point for the United States in the
discussions and agreement on it is seen as key to their success.
Trump on Friday told Fox News the deal was “potentially very close”.
Global markets have rallied in recent weeks on expectations the economic
superpowers will sign a mini pact as the first part of a wider trade deal,
though dealers are growing edgy at the lack of detail from either side.
There are also concerns about how tariffs will be wound back, with China
insisting they are lifted as part of any agreement.
“Although long on promise, but short on detail, China’s move appears to be
an attempt to mollify one of the US’s main reasons for initiating the trade
war in the first place,” said OANDA senior market analyst Jeffrey Halley.
“The hope being to get impetus back into the interim trade-talks.”
– ‘Sticking point’ –
On Monday, Tokyo ended 0.8 percent higher, while Shanghai rallied 0.7
percent and Seoul piled on one percent. Singapore added 0.1 percent, Sydney
climbed 0.3 percent and Mumbai jumped 0.9 percent. Wellington and Bangkok
also rose but Taipei, Manila and Jakarta went backwards.
“The markets are pretty much priced for a deal to go ahead, and that may
be the case, but we may see that pushed out to 2020,” Eleanor Creagh, market
strategist at Saxo Capital Markets, told Bloomberg TV.
“We can see China make concessions on intellectual property… also on the
currency and agricultural purchases. But the key sticking point is really
going to be the rolling back of tariffs.”
Hong Kong was the standout performer, surging 1.5 percent as pro-democracy
candidates headed for a huge win in community-level elections.
The results will send the Beijing-backed government a clear message of
broad public support for the demands of a protest movement that has gripped
the territory for months.
It will “be difficult for Beijing to ignore these results for fear of
greater international condemnation in the court of public opinion”, said
AxiTrader’s Stephen Innes. “The people have spoken, and now the ball is in
Beijing’s court.”
Property firms, which have taken a battering as the sometimes violent
demonstrations have dragged on, were among the best performers, while
embattled transport network controller MTR Corp was also a big gainer.
In early trade London rose 0.4 percent, Paris added 0.5 percent and
Frankfurt gained 0.7 percent.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: UP 0.8 percent at 23,292.81 (close)
Hong Kong – Hang Seng: UP 1.5 percent at 26,993.04 (close)
Shanghai – Composite: UP 0.7 percent at 2,906.17 (close)
London – FTSE 100: UP 0.4 percent at 7,352.54
Euro/dollar: UP at $1.1026 from $1.1024 at 2145 GMT
Pound/dollar: UP at $1.2850 from $1.2834
Euro/pound: DOWN at 85.80 pence from 85.87 pence
Dollar/yen: UP at 108.82 yen from 108.60 yen
West Texas Intermediate: UP 19 cents at $57.96 per barrel
Brent North Sea crude: UP 29 cents at $63.68 per barrel
New York – Dow: UP 0.4 percent at 27,875.62 (close)
BSS/AFP/RY/1524 hrs