ZCZC
BCN-26
ASIA-MARKETS-UPDATE
Asian markets mostly up following China data, eyes on trade talks
HONG KONG, Dec 2, 2019 (BSS/AFP) – Asian markets rose Monday as investors
cheered data showing a surprise jump in Chinese factory activity, while oil
prices bounced from last week’s sharp losses after Iraq said top producers
could announce a cut in output this week.
But while the week started on a positive note, worries about trade were
revived by China’s Global Times newspaper saying Beijing wanted all US
tariffs rolled back as part of a mini deal, a move observers said Washington
is unlikely to agree to.
China said on Saturday that its manufacturing sector expanded in November
for the first time in seven months, providing a much-needed boost to
investors looking for signs of optimism in the world’s number-two economy.
Another survey Monday of smaller firms also showed a better-than-expected
pick-up in factory activity.
The news comes as Beijing and Washington put the final touches to a
partial trade deal, the expected passage of which has helped global markets
rally for weeks.
“This improvement in the manufacturing (purchasing managers index) is
important because we can say with more certainty than at the beginning of the
year that China’s macro outlook is indeed stabilising,” Aninda Mitra, senior
sovereign analyst at BNY Mellon Investment Management, told Bloomberg News.
“A phase one-related pause, which seems to be around the corner, could
herald the end of further, scheduled tariff hikes and the rollback of those
imposed in September.”
Hong Kong rose 0.4 percent and Shanghai edged up 0.1 percent, while Sydney
and Seoul each finished 0.2 percent stronger.
Tokyo ended up one percent at a 14-month high, Taipei and Mumbai added 0.1
percent and Manila rallied more than one percent with Jakarta also rising.
But Singapore, Wellington and Bangkok fell.
MORE/HR/1305
ZCZC
BCN-27
ASIA-MARKETS-UPDATE 2 LAST HONG KONG
– ‘Very bitter trade pill’ –
“Recent manufacturing PMI data does appear to be showing signs of an
improvement, not only in the US, but across the rest of the world,” said
Michael Hewson at CMC Markets UK.
“This would appear to be a welcome respite to what has been an awful year
for the manufacturing sector, which has to all intents and purposes been in
recession for most, if not all, of this year.”
However, analysts raised concerns about an article in the Communist Party-
linked Global Times, which tweeted that the government wants levies imposed
on China to be removed as the US talks continue. It also said leaders wanted
tariffs lined up for December 15 to be taken off the table.
But OANDA senior market analyst Jeffrey Halley said: “It is hard to see
the US swallowing a very bitter trade pill like that; it would, in effect,
remove all of the US’s leverage in the far more difficult comprehensive trade
negotiations to come.”
“It is now becoming more apparent why the talks have dragged on so long.”
There was little immediate reaction on markets to news that China had
slapped punitive measures on the US in retaliation for its backing of a pro-
democracy movement in Hong Kong, announcing sanctions on NGOs and suspending
visits by US warships and aircraft.
On oil markets, both main contracts rallied after Iraq said on Sunday that
OPEC and other major producers would consider slashing output by 400,000
barrels a day to support prices when they meet in Vienna this week.
The gains chipped away at some of the huge losses suffered Friday after
reports said Russia was looking to delay any further output reductions until
April’s gathering.
But AxiTrader’s Stephen Innes said that while the headline figure “might
provide some initial price support, it might not be a huge swing factor since
Russia at this time seems set against (a cut) in favour of stricter
compliance”.
In early trade London and Frankfurt each rose 0.2 percent, while Paris
gained 0.3 percent.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: UP 1.0 percent at 23,529.50 (close)
Hong Kong – Hang Seng: UP 0.4 percent at 26,444.72 (close)
Shanghai – Composite: UP 0.1 percent at 2,875.81 (close)
London – FTSE 100: UP 0.2 percent at 7,363.67
Euro/dollar: UP at $1.1023 from $1.1017 late Friday
Pound/dollar: DOWN at $1.2917 from $1.2933
Euro/pound: UP at 85.33 pence from 85.18 pence
Dollar/yen: DOWN at 109.60 yen from 109.47
West Texas Intermediate: UP 74 cents at $55.91 per barrel
Brent North Sea crude: UP 63 cents at $61.12 (new contract)
New York – Dow: DOWN 0.4 percent at 28,051.41 (close)
BSS/AFP/HR/1510