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Asia markets on course for positive end to tough week
NEW YORK, July 13, 2018 (BSS/AFP) – Most Asian markets rose again on
Friday following a record close on Wall Street as trade war fears are
tempered by hopes China and the US will eventually reach a compromise, while
attention turns to the start of earnings season.
Equities have had a rollercoaster week, with strong US jobs figures
providing initial support before Donald Trump’s threatened tariffs on another
$200 billion of Chinese imports sent investors running for the hills on
Wednesday.
However, Beijing’s measured response to the warning and indications from
both sides that they are willing to talk has instilled trading floors with a
little optimism heading into the weekend.
US Treasury Secretary Steven Mnuchin on Thursday told lawmakers the White
House was “available” for discussions with China.
That came after China’s Vice Minister of Commerce Wang Shouwen said the
economic superpowers “should sit down and try to find a solution to this
trade problem”.
Expectations that US companies will report a surge in April-June earnings
have also helped deflect attention from the possibility of a damaging trade
war.
All three main indexes ended higher in New York with the Nasdaq hitting a
fresh record thanks to a rally in the tech sector.
And those gains filtered through to Asia, with the Nikkei in Tokyo ending
the morning session 1.3 percent higher thanks to a weaker yen, while Hong
Kong added 0.7 percent. Seoul gained more than one percent, Singapore added
0.1 percent and Taipei, Manila and Jakarta were also well up.
– Trump rattles pound –
However, Shanghai dipped 0.3 percent after jumping more than two percent
Thursday, while Sydney was 0.2 percent lower.
Hannah Anderson, global market strategist at JP Morgan Asset Management,
said: “Our baseline view is that trade policy uncertainty will continue
driving higher levels of volatility but will not fundamentally alter the
direction of markets over the next 12-18 months.
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“Moderate, negotiated solutions remain our base case outcomes for NAFTA
and China trade disputes. There is a rising risk, however, that if these
disputes drag on or intensify, market reactions could become deeper and more
persistent.”
On currency markets the upbeat mood has helped high-yielding currencies
higher against the dollar, with the Chinese yuan — which has taken a hit in
recent weeks on trade war fears — benefitting from words of support from
state media.
The dollar is sitting at six-month highs against the yen, which is
considered a safe bet in times of turmoil, while the US unit is holding
recent gains against the pound.
Sterling has been hammered this week by fresh concerns about Prime
Minister Theresa May’s political future after her pro-Brexit foreign minister
resigned over her plans for leaving the EU.
The selling picked up Thursday when Trump, on a visit to Britain,
criticised her handling of Brexit and warned that a US trade deal would be
dead if the country did not fully leave the bloc.
– Key figures at 0245 GMT –
Tokyo – Nikkei 225: UP 1.3 percent at 22,483.13 (break)
Hong Kong – Hang Seng: UP 0.7 percent at 28,671.52
Shanghai – Composite: DOWN 0.3 percent at 2,829.81
Dollar/yen: UP at 112.65 yen from 112.53 yen at 2100 GMT
Euro/dollar: UP at $1.1673 from $1.1671
Pound/dollar: DOWN at $1.3187 from $1.3207
Oil – West Texas Intermediate: DOWN 15 cents at $70.18 per barrel
Oil – Brent Crude: DOWN 38 cents at $74.07 per barrel
New York – Dow: UP 0.9 percent at 24,924.89 (close)
London – FTSE 100: UP 0.8 percent at 7,651.33 (close)
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