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Asian markets rose Monday on fresh
optimism over the long-running China-US trade talks after Beijing offered an
olive branch on the key issue of intellectual property, while Donald Trump
hailed progress on the agreement.
Hong Kong stocks led the regional advance with pro-democracy parties on
course for a landslide in local elections that could put pressure on the
local government and Beijing to act after months of protests that have
hobbled the city’s economy and transport.
The week got off to a strong start after China said at the weekend it
would hike penalties on violations of intellectual property rights while also
look at reducing the thresholds for criminal punishments of those who steal
IP.
The IP issue is a major sticking point for the United States in the
discussions and agreement on it is seen as key to their success.
Trump on Friday told Fox News the deal was “potentially very close”.
Global markets have rallied in recent weeks on expectations the economic
superpowers will sign a mini pact as the first part of a wider trade deal,
though dealers are growing edgy at the lack of detail from either side.
There are also concerns about how tariffs will be wound back, with China
insisting they are lifted as part of any agreement.
– ‘Sticking point’ –
On Monday, Tokyo ended the morning session 0.9 percent higher, while
Shanghai rallied 0.5 percent and Seoul piled on more than one percent.
Singapore jumped 0.4 percent, Sydney climbed 0.5 percent and Taipei gained
0.2 percent, with Wellington also rising.
“The markets are pretty much priced for a deal to go ahead, and that may
be the case, but we may see that pushed out to 2020,” Eleanor Creagh, market
strategist at Saxo Capital Markets, told Bloomberg TV.
“We can see China make concessions on intellectual property… also on the
currency and agricultural purchases. But the key sticking point is really
going to be the rolling back of tariffs.”
Hong Kong was the standout performer, surging 1.8 percent in the morning
as pro-democracy candidates headed for a huge win in community-level
elections.
The results will send the Beijing-backed government a clear message of
broad public support for the demands of a protest movement that has gripped
the territory for months.
It will “be difficult for Beijing to ignore these results for fear of
greater international condemnation in the court of public opinion”, said
AxiTrader’s Stephen Innes. “The people have spoken, and now the ball is in
Beijing’s court.”
Property firms, which have taken a battering as the sometimes violent
demonstrations have dragged on, were among the best performers, while
embattled transport network controller MTR Corp was also a big gainer.
– Key figures around 0320 GMT –
Tokyo – Nikkei 225: UP 0.9 percent at 23,326.61 (break)
Hong Kong – Hang Seng: UP 1.8 percent at 27,061.10
Shanghai – Composite: UP 0.5 percent at 2,898.91
Euro/dollar: DOWN at $1.1020 from $1.1024 at 2145 GMT
Pound/dollar: UP at $1.2854 from $1.2834
Euro/pound: DOWN at 85.75 pence from 85.87 pence
Dollar/yen: UP at 108.80 yen from 108.60 yen
West Texas Intermediate: UP 10 cents at $57.87 per barrel
Brent North Sea crude: UP 10 cents at $63.49 per barrel
New York – Dow: UP 0.4 percent at 27,875.62 (close)
London – FTSE 100: UP 1.2 percent at 7,326.81 (close)
(BSS)
