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ASIA-MARKETS-UPDATE
Asian markets rise after Fed chief boosts US confidence
HONG KONG, July 18, 2018 (BSS/AFP) – Asian markets largely rose on
Wednesday, tracking a Wall Street rally after the head of the Federal Reserve
expressed confidence in the US economy despite fears of a global trade war.
Federal Reserve chief Jerome Powell offered a positive outlook citing a
strong job market and inflation figures in line with Fed targets, sending US
stocks higher.
“Powell’s testimony was music to investor’s ears as the Dow gained for the
4th consecutive day while the Nasdaq hit a new high-water mark”, said Stephen
Innes, head of Asia-Pacific trading at OANDA.
But Powell acknowledged uncertainty over the “outcome of current
discussions over trade policy”, with US President Donald Trump hitting out at
China and other economic partners as he adopts an aggressive “America First”
policy.
Fears about an all-out China-US trade war continue to rattle investors,
with both sides lodging counter-complaints at the World Trade Organization
after recently imposing and threatening further tariffs on billions of
dollars worth of goods.
Washington’s traditional allies Japan and the EU have also not been spared
from hefty US tariffs.
In a move described by officials as a “clear message” against
protectionism, the EU and Japan signed a sweeping free trade deal on Tuesday,
eliminating tariffs for a wide range of products from Japanese cars to French
cheese.
Japanese exporters advanced in Wednesday trading with Toyota rising 1.35
percent to 7,473 yen, Panasonic gaining 0.62 percent to 1,452 yen and Olympus
ending up 0.90 percent at 4,450 yen.
Tokyo rose 0.4 on the back of a cheaper yen as the dollar strengthened
following Powell’s upbeat view of the US economy. Singapore also gained 0.3
percent while Sydney climbed 0.7 percent.
But Shanghai lost one percent while Hong Kong edged down 0.3 percent.
And Seoul fell 0.3 percent as South Korea’s finance minister warned that an
all-out trade war between the US and China would have grim implications for
the export-reliant country.
MORE/HR/1348
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
In early trade London and Paris gained 0.4 percent and Frankfurt climbed
0.5 percent.
– Oil falls –
Oil extended its losses after an industry group reported a surprise
increase in US inventory.
Both main contracts fell following a report late Tuesday by the American
Petroleum Institute that US crude stockpiles had increased by more than
600,000 barrels last week.
After withdrawing from the Iran nuclear deal in May, the US said it would
reinstate sanctions on the oil-producing nation, and warned other countries
to stop purchasing Iranian exports including crude.
But US Treasury Secretary Steve Mnuchin recently said that Washington would
consider making an exception for certain countries which cannot immediately
halt imports, adding further pressure on prices.
Traders will now be looking towards data from the US Energy Information
Authority, due later Wednesday, for an indication of US demand and supply.
” Oil has had some big falls. But every time it drops recently there seems
to be some sort of supply disruption news that puts the bid back in the
market,” said Greg McKenna, chief market strategist at AxiTrader.
– Key figures at 0710 GMT –
Tokyo – Nikkei 225: UP 0.4 percent at 22,794.19 (close)
Hong Kong – Hang Seng: DOWN 0.3 percent at 28,110.07
Shanghai – Composite: DOWN 1.0 percent at 2,759.13 (close)
London – FTSE 100: UP 0.4 percent at 7,656.73
Dollar/yen: UP at 113.06 yen from 112.84 yen at 2100 GMT
Euro/dollar: DOWN at $1.1636 from $1.1662
Pound/dollar: DOWN at $1.3099 from $1.3113
Oil – West Texas Intermediate: DOWN 52 cents at $67.56 per barrel
Oil – Brent Crude: DOWN 52 cents at $71.64 per barrel
New York – Dow: UP 0.2 percent at 25,119.89 (close)
BSS/AFP/HR/1350