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ASIA-MARKETS-UPDATE
Asian markets down after strong run as Wall St fails to inspire
HONG KONG, Aug 30, 2018 (BSS/AFP) – Most Asian markets fell Thursday, with
investors unable to build on another record close on Wall Street, instead
taking profits after a strong week.
New York’s indexes powered ahead as news that Canada and the United States
were close to a fresh deal that would revive the North American Free Trade
Agreement coincided with better-than-expected US growth and a possible
breakthrough in Brexit talks.
The pound and euro were also holding up after surging when the European
Union’s top negotiator said it was open to a unique deal with Britain, which
raised hopes the country will leave the bloc with a working relationship.
For most of this year world markets have been under pressure as China and
the US have threatened and imposed tit-for-tat tariffs that fuelled fears of
a global trade war, while Washington has also picked fights with allies
including the EU, Canada and Mexico.
But optimism has recently picked up. On Monday Donald Trump and his
Mexican counterpart Enrique Pena Nieto announced a new trade agreement and on
Wednesday came news that Canada was close to a deal, fuelling hopes for a
NAFTA 2.0.
Trump and Canadian Prime Minister Justin Trudeau expressed optimism a deal
was close and the White House plans to notify Congress on Friday of its
intention to enter into a new free-trade agreement.
Also on Wednesday the Commerce Department said the US economy expanded
more than initially reported in the second quarter thanks to a rise in
business investment.
“If you think about the handbrake on sentiment over the past six months or
so, it’s mostly about the handbrake on growth and the uncertainty that the
trade wars have caused with a little added worry about what Brexit might look
like,” said Greg McKenna, chief market strategist at AxiTrader.
“So, news overnight that we could have Canada in a new NAFTA deal by the
end of this week and that the EU is ready to offer the UK an unprecedented
deal is good news for markets. And for the global economy.”
MORE/HR/1448
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
– ‘We are ready’ –
The S&P 500 and Nasdaq chalked up a fourth straight day of records on the
latest developments.
However, Asian dealers took a step back after a healthy run this week.
Tokyo ended up 0.1 percent but Shanghai sank more than one percent and
Hong Kong lost 0.9 percent.
Singapore lost 0.5 percent, Seoul was off 0.1 percent and Sydney was
marginally lower, while there were also losses in Wellington, Taipei and
Mumbai.
On currency markets the pound and euro dipped but held most gains against
the dollar after jolting higher on comments from EU negotiator Michel Barnier
hinting at a possible Brexit deal.
“We are ready… to propose a partnership like there has never been before
with any other third country,” he told a Berlin press conference alongside
German Foreign Minister Heiko Maas Wednesday.
He added the pact could include “an ambitious free-trade agreement” and
cooperation in aviation, security and foreign policy.
The pound shot above $1.30 for the first time since the start of August,
while the euro maintained its strength around $1.17.
The Mexican peso and Canadian dollar were also higher thanks to the trade
hopes.
However, the Turkish lira was wallowing around 6.47 to the dollar as
traders brushed off Ankara’s attempts to reassure investors after Moody’s
downgraded its credit ratings on 20 Turkish financial institutions.
The lira, hammered by a financial crisis at home made worse by US
sanctions, has tumbled from about six to the dollar since Turkish markets
reopened Monday after a week-long break.
In early European trade London slipped 0.5 percent, Paris dropped 0.2
percent and Frankfurt was 0.4 percent off.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: UP 0.1 percent at 22,869.50 (close)
Hong Kong – Hang Seng: DOWN 0.9 percent at 28,164.05 (close)
Shanghai – Composite: DOWN 1.1 percent at 2,737.74 (close)
London – FTSE 100: DOWN 0.5 percent at 7,526.95
Euro/dollar: DOWN at $1.1705 from $1.1709 at 2100 GMT
Pound/dollar: DOWN at $1.3026 from $1.3028
Dollar/yen: UP at 111.63 yen from 111.68 yen
Oil – West Texas Intermediate: UP 28 cents at $69.79
Oil – Brent Crude: UP 21 cents at $77.35 per barrel
New York – Dow Jones: UP 0.2 percent at 26,124.57 (close)
BSS/AFP/HR/1450