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Asian markets push on with rally after US-Mexico trade deal
HONG KONG, Aug 28, 2018 (BSS/AFP) – Asian investors extended a rally on
Tuesday, tracking another Wall Street record as investors cheered a fresh
trade deal between the United States and Mexico that brings an end to one row
picked by Donald Trump that had rattled global markets.
The agreement raises hopes the two-decade-old North American Free Trade
Agreement, torn up by the White House soon after Trump’s election, can be
salvaged after Canada rejoins talks on Tuesday.
The pact was described by the US president as “a big day for trade” and it
sent the S&P 500 and Nasdaq to fresh all-time highs, while the Dow broke
26,000 for the first time since January.
Monday’s agreement comes after officials from Washington and Beijing held
talks last week aimed at easing trade tensions that have seen them hit each
other with tariffs on tens of billions of dollars worth of goods.
While the meeting did not achieve any breakthrough, the fact they took
place was seen as a good sign.
Stephen Innes, head of Asia-Pacific trading at OANDA, said dealers were “in
a festive mood” as the deal removed “one major hurdle that has been haunting
North American investors for months”.
He added: “Markets are revelling in any trade positives… After all, a
deal is a deal.”
Equities, which enjoyed a healthy run after Federal Reserve boss Jerome
Powell indicated Friday the bank would not aggressively lift interest rates,
continued to rise.
Tokyo went into the break 0.6 percent higher with Toyota surging almost two
percent after saying it will invest about $500 million into Uber as part of a
deal to work on mass-producing self-driving vehicles.
Hong Kong added 0.5 percent and Shanghai rose 0.2 percent.
Sydney climbed 0.7 percent and Singapore was 0.8 percent higher, with Seoul
adding 0.4 percent and Taipei 0.6 percent stronger.
MORE/MR/1034 hrs
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Manila, Wellington and Jakarta were also sharply higher.
The more upbeat outlook helped high-yielding currencies. Mexico’s peso
jumped more than one percent on the news but struggled to maintain the gains
on Tuesday, though the Canadian dollar was up 0.8 percent.
South Korea’s won, the Australian dollar and the South African rand also
enjoyed solid buying.
The Turkish lira fell 1.7 percent to around 6.2 against the dollar as the
country’s markets reopened after a week-long holiday, with dealers continuing
to fret over the financial crisis in the country.
The euro dipped by managed to hold gains that came on the back of data
showing business confidence in the German economy, Europe’s biggest, bounced
back as fears over a US trade war eased.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.6 percent at 22,944.77 (break)
Hong Kong – Hang Seng: UP 0.5 percent at 28,416.91
Shanghai – Composite: UP 0.2 percent at 2,785.19
Euro/dollar: DOWN at $1.1674 from $1.1680 at 2100 GMT Pound/dollar: DOWN at
$1.2878 from $1.2895
Dollar/yen: UP at 111.26 yen from 111.07 yen
Oil – West Texas Intermediate: UP 13 cents at $69.00 per barrel
Oil – Brent Crude: UP 20 cents at $76.41 per barrel
New York – Dow Jones: UP one percent at 26,049.64 (close)
London – FTSE 100: Closed for holiday
BSS/AFP/MR/ 1034 hrs