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Asian markets rose Thursday but
investors moved cautiously as they sifted through conflicting reports about
the outlook for upcoming China-US trade talks.
Global investors have been broadly upbeat in recent weeks that the meeting
in Washington between top-level representatives would see at least some
progress.
But with the much-anticipated gathering due to start within hours, Hong
Kong’s South China Morning Post reported pre-meeting discussions had not made
any progress on key areas such as forced technology transfers, and would be
cut in half to just one day.
That came after Wall Street’s three main indexes had ended with healthy
gains on reports that a pared-down deal was still possible, with Beijing
boosting agricultural purchases and the US delaying the imposition of new
tariffs next week.
Tensions were already showing this week after the US unveiled restrictions
on 28 Chinese entities over human rights violations in Xinjiang province and
imposed visa restrictions on some officials, while a report said the White
House was considering curtailing US investment in the country.
For its part, sources were reported to have said China had narrowed the
issues it was willing to discuss as it felt in a stronger position owing to
Donald Trump facing an impeachment inquiry at home and a weakening economy.
The SCMP report “reverses the trade optimism that was dominating overnight
flow as investors were hoping that at minimum, some type of a deal could be
forged”, said Stephen Innes, Asia-Pacific market strategist at AxiTrader.
– ‘Petals from a flower’ –
“So instead of debating how encompassing the deal might be, investors are
now back to plucking petals from a flower guessing if there will be a deal at
all.”
On regional markets Shanghai and Hong Kong each rose 0.4 percent while
Tokyo went into the break 0.5 percent higher. Sydney and Singapore each added
0.1 percent, with Manila and Jakarta also higher.
Wellington was flat and Seoul sank 0.8 percent.
In foreign exchanges, the dollar was lower against most other currencies
after minutes from the Federal Reserve’s September policy meeting showed it
was growing concerned about the impact of Trump’s trade war.
The central bank is expected to cut interest rates for a third time when
the board meets again later this month.
The minutes “revealed greater concerns over downside risk from slowing
global growth and trade tensions with subdued inflation also seen as a reason
to cut”, said Rodrigo Catril at National Australia Bank.
But he pointed out that “a few officials saw the need to push back against
market Fed rate cut expectations”.
Oil prices extended Wednesday’s losses following data showing a bigger-
than-forecast pick-up in US inventories that reinforced worries about the
impact on demand from a global slowdown and trade frictions.
The data reversed a rally of more than one percent in the commodity that
came after Turkey launched an offensive against Kurdish militants in northern
Syria.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: Up 0.5 percent at 21,555.67 (break)
Hong Kong – Hang Seng: UP 0.4 percent at 25,775.22
Shanghai – Composite: UP 0.4 percent at 2,935.45
Pound/dollar: UP at $1.2219 from $1.2205 at 2050 GMT
Euro/pound: UP at 89.92 pence from 89.89 pence
Euro/dollar: UP at $1.0987 from $1.0972
Dollar/yen: DOWN at 107.45 yen from 107.49 yen
West Texas Intermediate: DOWN 21 cents at $52.38 per barrel
Brent North Sea crude: DOWN 26 cents at $58.06 per barrel
New York – Dow: UP 0.7 percent at 26,346.01 (close)
London – FTSE 100: UP 0.3 percent at 7,166.50 (close)
(BSS)
