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Asian markets head into weekend with losses as G7 looms
NEW YORK, June 8, 2018 (BSS/AFP) – Asian markets retreated on Friday at
the end of a broadly positive week, with traders turning their attention to a
Group of Seven summit that could see world leaders clash with Donald Trump
over his latest tariff provocations.
While there remain concerns about a possible trade war and other
geopolitical issues, equities have enjoyed a positive run since last Friday’s
strong US jobs report that fuelled optimism in the global outlook.
The euro has also held on to its latest gains on expectations the European
Central Bank will soon start winding down its crisis-era stimulus, while oil
added to Thursday’s rally as Venezuela struggles to produce and export.
Japan’s Nikkei ended the morning session 0.1 percent down, while Hong Kong
lost one percent after a six-day run.
Shanghai slipped 0.9 percent ahead of key Chinese trade data, Sydney lost
0.1 percent, Singapore was down 0.5 percent and Seoul dropped 0.7 percent.
Taipei, Manila and Jakarta were also down.
As leaders arrive in Quebec for the G7 meeting, there is talk that Trump
could expect some harsh words after he imposed tariffs on steel and aluminium
from Canada, Mexico and the European Union.
The move has led to retaliatory measures and sparked fears of a global
trade war.
– Tense talks –
“Usually (the G7 summit is) a non-event for markets but with all the focus
on escalating trade tensions amongst long-standing allies, there’s a good
reason for investors to be chary as this meeting is unlikely to follow an
orderly arrangement of discussion,” said Stephen Innes, head of Asia-Pacific
trade at OANDA.
“Even more so as Canada and Mexico have retaliated against a range of US
exports and the EU has promised to do so as well.”
Canadian Prime Minister Justin Trudeau and German Chancellor Angela Merkel
have said they expect tense discussions, while France’s Emmanuel Macron said
governments should not be shy about making deals without Washington.
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The White House’s stance on environmental issues is also expected to be on
the agenda.
However, there is hope over China-US trade talks after they reached a deal
allowing Chinese telecoms equipment maker ZTE to pay a $1.4 billion fine
instead of being hit by a seven-year ban on selling to US firms.
Oil prices were marginally higher a day after jumping at least two percent
on a report that major producer Venezuela was struggling to ship its
commodity.
Also providing support were signs of cracks in oil cartel OPEC, with some
members not as keen As kingpin Saudi Arabia to end an output cap that has
been in place with Russia for two years.
“While oil prices may have seen their near-term peaks, it’s highly
unlikely prices will collapse but rather OPEC, through gradual supply
increases, will guide prices low enough so US consumers will not feel the
pinch, yet remain high enough to benefit the industry going forward,” Innes
added.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.1 percent at 22,799.69 (break)
Hong Kong – Hang Seng: DOWN 1.0 percent at 31,212.56
Shanghai – Composite: DOWN 0.9 percent at 3,080.75
Euro/dollar: UP at $1.1803 from $1.1799 at 2100 GMT
Pound/dollar: DOWN at $1.3419 from $1.3421
Dollar/yen: UP at 109.76 yen from 109.73 yen
Oil – West Texas Intermediate: UP 13 cents at $66.08
Oil – Brent Crude: UP one cent at $77.33 per barrel
New York – Dow Jones: UP 0.4 percent at 25,241.41 (close)
London – FTSE 100: DOWN 0.1 percent at 7,704.40 (close)
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