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Asia markets end week with losses as dealers await trade progress
HONG KONG, Nov 29, 2019 (BSS/AFP) – Asian markets fell on Friday as
investors wound down for the end of the month, while awaiting news of
progress on China-US trade talks but with optimism tainted by the row over
Hong Kong.
Donald Trump’s decision to sign a bill in support of pro-democracy
protesters in the city and back their rights sparked warnings of retaliation
from Beijing and fuelled fears for negotiations on a mini trade deal that are
in their final straight.
However, China has not detailed what its response to the Hong Kong law
will be and observers say it is unlikely to do anything to derail a tariffs
agreement owing to its weakening economy.
“China’s threats to retaliate over the US Hong Kong law will probably
remain just that; threats,” said Jeffrey Halley at OANDA.
“China has its own issues, especially around corporate debt and regional
bank credit quality. It can ill-afford to waste any progress so far.
Pragmatism should overcome anger.”
Still, the threat of serious measures continues to weigh on sentiment and
with US markets closed for the Thanksgiving holiday, there were few catalysts
to buy for Asian traders.
Hong Kong was the biggest loser, dropping two percent, while Shanghai fell
0.6 percent and Tokyo shed 0.5 percent.
– Tariffs loom ‘ominously’ –
Singapore lost 0.4 percent, and Seoul dropped 1.5 percent after the South
Korean central bank lowered its growth outlook and decided against cutting
interest rates despite the economy struggling.
Taipei dropped more than one percent and Mumbai fell 0.9 percent, while
Manila and Jakarta also retreated. However, Jakarta and Wellington posted
healthy gains.
“Markets are on a sort of ‘wait and hold’ in terms of that phase-one trade
deal,” David Riley of BlueBay Asset Management told Bloomberg TV.
“If there is a skinny deal, that will allow markets and risk assets to
grind higher even if there is no real prospect of a phase two or subsequent
detailed negotiation occurring this side of US Presidential elections.”
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But AxiTrader’s Stephen Innes said investors “are probably getting a tad
jittery about turning the page on November without a trade talk venue as
December 15 and the possible imposition of 15 percent tariffs on $160 billion
of Chinese goods looms ominously”.
On currency markets, the pound held gains on expectations the ruling
Conservatives will win next month’s general election, allowing it to push
through Prime Minister Boris Johnson’s Brexit agreement and avoid a no-deal
divorce from the European Union.
The Chilean central bank injected $20 billion into the economy in a bid to
support the ailing peso, which hit another record low Thursday. The South
American country has been hammered by the worst social unrest in three
decades, as well as a fall in the price of copper, of which Chile is the
world’s leading producer.
In early trade London and Frankfurt fell 0.5 percent while Paris eased 0.3
percent.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: DOWN 0.5 percent at 23,293.91 (close)
Hong Kong – Hang Seng: DOWN 2.0 percent at 26,346.49 (close)
Shanghai – Composite: DOWN 0.6 percent at 2,871.98 (close)
London – FTSE 100: DOWN 0.5 percent at 7,381.75
Euro/dollar: UP at $1.1010 from $1.1008
Pound/dollar: DOWN at $1.2903 from $1.2909
Euro/pound: UP at 85.33 pence from 85.29
Dollar/yen: DOWN at 109.51 at 109.52 yen
West Texas Intermediate: DOWN two cents at $58.09 per barrel
Brent North Sea crude: DOWN nine cents at $63.78 per barrel
New York – Dow: Closed for a public holiday
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