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Asian markets swing after bruising week with trade centre stage
HONG KONG, Aug 3, 2018 (BSS/AFP) – Asian equities were mixed on Friday
after another painful week as fears of an all-out trade war between Beijing
and Washington keep investors on edge, while China’s stock market was toppled
by Japan as the world’s number two.
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 in to “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 sank one percent, after both swung
in and out of positive territory through the day, while traders on the
mainland largely brushed off promises of government support to the struggling
economy.
– China ranking drop –
Adding to the pain of recent losses, China’s stock market was overtaken as
the world’s second-biggest by Japan’s Friday, having been hit by trade war
fears and slowing economic growth.
Bloomberg News figures showed Chinese stocks were worth $6.09 trillion,
compared with $6.17 trillion in Japan. The US market is worth $31 trillion.
“Investors are paying attention to government policies as the US-China
trade war will remain uncertain for now,” Yoshihiro Okumura, general manager
at Chibagin Asset Management, told AFP in Tokyo.
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“On the other hand, Japanese companies are showing strong results in
general, sustaining share prices on the Tokyo Stock Exchange.”
The yuan also extended losses on trade war worries and concerns about
growth. However, 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 up 0.1 percent, while Sydney edged down 0.1 percent and
Singapore slipped 0.2 percent.
Seoul, Wellington, Taipei, Mumbai and Manila were all higher.
In early trade London and Paris each rose 0.3 percent, while Frankfurt
added 0.2 percent.
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 0810 GMT –
Tokyo – Nikkei 225: UP 0.1 percent at 22,525.18 (close)
Hong Kong – Hang Seng: DOWN 0.1 percent at 27,676.32 (close)
Shanghai – Composite: DOWN 1.0 percent at 2,740.44 (close)
London – FTSE 100: UP 0.3 percent at 7601.50
Euro/dollar: UP at $1.1579 from $1.1584 at 2100 GMT
Pound/dollar: UP at $1.3008 from $1.3016
Dollar/yen: UP at 111.71 yen from 111.66 yen
Oil – West Texas Intermediate: DOWN eight cents at $68.88 per barrel
Oil – Brent Crude: DOWN five cents at $73.40 per barrel
New York – Dow Jones: FLAT at 25,326.16 (close)
BSS/AFP/HR/1445