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Asian markets swing after bruising week with trade centre stage
HONG KONG, Aug 3, 2018 (BSS/AFP) – Asian markets fluctuated on Friday after
another painful week as fears of an all-out trade war between China and the
United States keep investors on edge.
While Apple provided a boost for Wall Street after hitting the $1 trillion
market capitalisation mark, the prospect of the world’s top two economies
exchanging painful tariffs on hundreds of billions of dollars of goods is
stunting optimism.
Shares, which have been on the slide for several weeks owing to the
increasingly heated trade row, took another hit this week when the White
House said it was considering more than doubling threatened tariffs on $200
billion of Chinese imports.
Beijing responded by saying it would not give into “blackmail”.
“There are genuine concerns about this trade war underlying markets, which
makes any genuine retaliation from China, rather than the current rhetorical
approach, an issue for markets,” said Greg McKenna, chief market strategist
at AxiTrader.
However, while he warned “the risks of escalation remain high”, he added
that “the market still thinks (the latest US threat) is just a negotiating
tactic”.
Hong Kong lost 0.1 percent and Shanghai 0.2 percent, with both having swung
in and out of positive territory through the morning, while traders on the
mainland have largely brushed off promises of government support to the
struggling economy.
The yuan extended losses on trade war worries and concerns about growth,
but Ian Hui, global market strategist at JP Morgan Asset Management, said in
a note: “Chinese officials will remain wary of letting the yuan weaken too
much, as that may risk issues for capital flight and financial stability.”
Tokyo ended the early session up 0.1 percent, while Sydney edged up 0.1
percent and Singapore slipped 0.1 percent.
Seoul and Wellington each added 0.4 percent, with Taipei and Manila also
slightly higher.
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Attention now shifts to the release later Friday of US jobs data, which
will provide the latest snapshot of the US economy and give an idea about the
Federal Reserve’s plans for future interest rate hikes.
The pound struggled to break back against the dollar after Thursday’s drop
that came as the Bank of England’s hike in interest rates to a nine-year high
was offset by its tepid outlook for further increases in the near term owing
to Brexit uncertainty.
– Key figures at 0230 GMT –
Tokyo – Nikkei 225: UP 0.1 percent at 22,545.15 (break)
Hong Kong – Hang Seng: DOWN 0.1 percent at 27,688.61
Shanghai – Composite: DOWN 0.2 percent at 2,761.60
Euro/dollar: UP at $1.1587 from $1.1584 at 2100 GMT
Pound/dollar: UP at $1.3018 from $1.3016
Dollar/yen: UP at 111.70 yen from 111.66 yen
Oil – West Texas Intermediate: DOWN one cent at $68.95 per barrel
Oil – Brent Crude: DOWN 10 cents at $73.35 per barrel
New York – Dow Jones: FLAT at 25,326.16 (close)
London – FTSE 100: DOWN 1.0 percent at 7,575.93 (close)
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