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ASIA-MARKETS-UPDATE
Asian markets post strong gains after Wall St rally
HONG KONG, Aug 27, 2018 (BSS/AFP) – Asian markets rallied Monday following
a record lead from Wall Street, while the dollar recovered some ground but
remained under pressure after the Federal Reserve boss suggested it would not
speed up the timetable for interest rate rises.
Jerome Powell said the US economy was healthy and prices showed no sign of
rising more than the bank’s two percent target, adding that there appeared to
be no risk of overheating.
The remarks at the annual Jackson Hole central bankers’ symposium in
Wyoming on Friday were taken as a sign the Fed would stick to its gradual
increases in borrowing costs — a development which weighed on the dollar but
boosted equities.
The S&P 500 and Nasdaq closed at fresh records and Asian equity traders
took up the lead.
Tokyo ended 0.9 percent higher, Hong Kong jumped more than two percent,
Shanghai added 1.9 percent and Singapore put on 0.7 percent. Seoul gained 0.3
percent and Sydney put on 0.4 percent while there were also gains in
Wellington, Taipei and Jakarta.
In forex trading the dollar was mixed after tumbling Friday, while
Mexico’s peso was boosted by news that US and Mexican officials were close to
a deal on a revised free-trade pact.
The yuan also won support after the People’s Bank of China said Friday it
had made a policy tweak to prevent the currency from falling too sharply.
The central bank adjusted the way it fixes the unit’s midpoint each day as
it looks to provide more stability at a time when the dollar is broadly in
the ascendant.
It also comes as leaders try to ease trade tensions with the United
States, with Donald Trump accusing Beijing of keeping the yuan artificially
low to boost its exports and offset the impact of tariffs.
The announcement “should calm both local and international investors that
this move does signal the PBoC has no intention of moving into a full-scale
currency war in the trade war escalations”, said Stephen Innes, head of Asia-
Pacific trading at OANDA.
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
He also said the euro could face headwinds after Italy’s populist
government threatened to withdraw European Union funding unless it agrees to
take some of the 150 people stranded on an Italian coastguard ship.
“I expect the market to start fading on this recent euro move because of
Italy’s risk, which matters because it’s enormous and the ECB is more than
content sitting on their hands,” Innes said.
In early European trade Paris rose 0.4 percent and Frankfurt was 0.5
percent higher. London was closed for a public holiday.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: UP 0.9 percent at 22,799.64 (close)
Hong Kong – Hang Seng: UP 2.2 percent at 28,271.27 (close)
Shanghai – Composite: UP 1.9 percent at 2,780.90 (close)
Euro/dollar: DOWN at $1.1615 from $1.1623 at 2040 GMT Friday
Pound/dollar: DOWN at $1.2838 from $1.2847
Dollar/yen: DOWN at 111.14 yen from 111.21 yen
Oil – West Texas Intermediate: DOWN 26 cents at $68.46 per barrel
Oil – Brent Crude: DOWN 18 cents at $75.64 per barrel
New York – Dow Jones: UP 0.5 percent at 25,790.35 (close)
London – FTSE 100: Closed for holiday
BSS/AFP/HR/1420