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ASIA-MARKETS-UPDATE
Asian markets edge up but rally wobbles
HONG KONG, Sept 20, 2018 (BSS/AFP) – Most Asian markets rose Thursday but
their recent rally lost its legs, though emerging market currencies held
their own after Beijing’s pledge not to weaponise the yuan in its trade
standoff with the United States.
Regional markets have been on the rise this week after the latest tit-for-
tat tariffs from China and the US were considered lenient and allowed for
talks, with observers suggesting a further escalation was unlikely in the
near term.
And while China on Wednesday hit back at Donald Trump’s accusation that it
is using the trade conflict to affect November’s key mid-term elections, the
generally upbeat sentiment continued into Thursday morning.
However, investors began to step back as the day wore on. Tokyo ended
barely moved, Shanghai was slightly lower and Hong Kong fluctuated before
ending up 0.3 percent.
Singapore inched higher and Seoul put on 0.7 percent while Wellington
edged up 0.2 percent following data showing the New Zealand economy grew at
its fastest in two years during the second quarter.
Jakarta put on 0.9 percent but Sydney, Taipei and Manila dropped.
“With both the US and China likely to resume negotiations, expectations
are still there for a resolution before President Trump deems it necessary to
double down on tariffs,” said Stephen Innes, head of Asia-Pacific trade at
OANDA.
Wall Street had provided a positive lead with all three main indexes
hovering near record highs.
– ‘Encouraging’ –
Emerging market (EM) currencies were enjoying some much-needed buying
support, having been beaten down by trade war fears in recent months, as well
as concerns of a spillover from crises in Argentina, South Africa and Turkey.
Analysts said that as well as the easing trade tensions, a key boost for
the currencies was Premier Li Keqiang’s statement that China would not
devalue the yuan to fend off the effects of any tariffs.
MORE/HR/1428
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ASIA-MARKETS-UPDATE 2 LAST HONG KONG
“China will never rely on the depreciation of the renminbi (yuan) to
stimulate exports, because a one-way depreciation of the renminbi exchange
rate will have more disadvantages than advantages,” he told an economic
forum.
“The premier’s comments are encouraging as they indicate that China won’t
actively use its currency as a weapon in its trade scuffle with the US,” said
Rodrigo Catril, senior forex strategist at National Australia Bank.
However, he added: “As we have seen in recent months this doesn’t
necessarily mean that China will prevent the yuan from weakening if market
forces push the currency lower.”
A devaluation in 2015 sent world markets and EM currencies plunging.
On Thursday Indonesia’s rupiah, the Malaysian ringgit and the Thai baht
all added 0.3 percent, while the South Korean won was 0.1 percent up.
Turkey’s lira climbed 0.9 percent, while the South African rand and
Russian ruble were 0.3 percent higher.
Oil prices extended Wednesday’s gains, which were spurred by data showing
US stockpiles fell to a three-year low, offsetting concerns about the
possible impact of a trade war.
“Falling US crude stockpile suggests the demand side is strong,” said
Margaret Yang Yan, market analyst at CMC Markets Singapore.
In early trade London was added 0.1 percent, Paris jumped 0.4 percent and
Frankfurt gained 0.2 percent.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: FLAT at 23,674.93 (close)
Hong Kong – Hang Seng: UP 0.3 percent at 27,477.67 (close)
Shanghai – Composite: DOWN 0.1 percent at 2,729.24 (close)
London – FTSE 100: UP 0.1 percent at 7,338.27
Euro/dollar: UP at $1.1701 from $1.1675 at 2100 GMT
Pound/dollar: UP at $1.3184 from $1.3146
Dollar/yen: DOWN at 112.25 yen from 112.26 yen
Oil – West Texas Intermediate: UP 55 cents at $71.67 per barrel
Oil – Brent Crude: UP 28 cents at $79.68 per barrel
New York – Dow Jones: UP 0.6 percent at 26,405.76 (close)
BSS/AFP/HR/1430