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ASIA-MARKETS-UPDATE
Most Asia markets up on Fed outlook, pound in view as UK votes
HONG KONG, Dec 12, 2019 (BSS/AFP) – Asian equities mostly rose and the
dollar was subdued Thursday after the Federal Reserve indicated it was
unlikely to change interest rates throughout next year, while the pound was
in focus as the UK votes in a general election.
Investors are also tracking developments in the China-US trade talks, with
nervousness setting in as a deadline for fresh US tariffs on Chinese goods
approaches and no sign yet that they will be delayed.
While negotiations between the economic superpowers are the main focus on
trading floors, the Fed’s latest policy announcement stole the show
Wednesday.
The central bank, which has cut borrowing costs three times this year,
said after a two-day meeting it would hold them for now and set its sights on
low inflation and the global economy.
The comments suggest it will stand pat throughout 2020, while Kerry Craig,
at JP Morgan Asset Management, said “a sizeable turn in the economic and
inflation outlook in either direction will be required for markets to
contemplate any sort of move in interest rates”.
The prospect of rates remaining low for some time lifted Wall Street, and
most of Asia followed suit.
Hong Kong, Seoul and Taipei each piled on more than one percent, Tokyo
ended up 0.1 percent and Singapore jumped 0.9 percent. Mumbai, Bangkok and
Wellington were all higher.
But Shanghai dipped 0.3 percent, while Sydney fell 0.7 percent and Manila
dropped 0.1 percent.
– ‘Unpredictable’ election –
There was little fresh news on the trade talks. The general consensus is
for Washington and Beijing to eventually reach an agreement as part of a
wider deal to end their long-running spat.
However, while both sides have played up the good work so far, there are
growing worries that the US will not cancel or delay fresh levies due on
December 15, which observers fear could block any further progress in the
negotiations.
MORE/HR/1455
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
The dollar faced selling pressure from across the board as dealers
contemplate the lower-rate environment, with higher-yielding, riskier assets
such as the Australian dollar, South Korean won and Mexican peso clocking up
big gains.
The pound was also benefitting, though traders have grown a little nervous
after a huge and respected poll suggested Prime Minister Boris Johnson’s
forecast majority might not be as big as expected after Thursday’s general
election.
The YouGov study jolted confidence that the ruling Conservatives would win
a big enough mandate to push through the PM’s Brexit deal and avert a no-deal
EU divorce. The latest readings have revived the chances of another hung
parliament that would sow further uncertainty.
“Broadly speaking, we believe that markets have gone a bit far ahead of
themselves in pricing a robust Tory majority,” Mark Dowding, at BlueBay Asset
Management, said.
“This election remains pretty unpredictable and although a majority for
Johnson seems the most likely outcome, we don’t think we can rule out
surprises on Thursday evening.”
In early trade London rose 0.1 percent as polls opened across the United
Kingdom, while Frankfurt also gained 0.1 percent and Paris added 0.2 percent.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: UP 0.1 percent at 23,424.81 (close)
Hong Kong – Hang Seng: UP 1.3 percent at 26,994.14 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,915.70 (close)
London – FTSE 100: UP 0.1 percent at 7,222.61
Pound/dollar: UP at $1.3215 from $1.3196 at 2150 GMT
Euro/pound: DOWN at 84.28 pence from 84.33 pence
Euro/dollar: UP at $1.1138 from $1.1129
Dollar/yen: DOWN at 108.64 yen from 108.56 yen
West Texas Intermediate: UP 11 cents at $58.87 per barrel
Brent North Sea crude: UP 28 cents at $64.00 per barrel
New York – Dow: UP 0.1 percent at 27,911.30 (close)
BSS/AFP/HR/1500