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ASIA-MARKETS-UPDATE
Asian markets rally after Wall St surge but traders still on edge
HONG KONG, Oct 31, 2018 (BSS/AFP) – Asian markets staged a rare rally
Wednesday following a bounce on Wall Street, with attention turning to the
release of key US jobs data later in the week.
But while investors briefly have a spring in their step, a mountain of
problems — from China-US trade tensions and Brexit, to Chinese weakness and
rising US interest rates — is keeping optimism at a premium.
October has been a painful month for Asian equities, which have seen
billions wiped from their values, and observers warn of further pain, with
Washington and Beijing seemingly unlikely to back off from their tariffs
standoff anytime soon.
Still, Wall Street put in a healthy performance Tuesday — the Dow added
1.8 percent while the S&P 500 and Nasdaq jumped 1.6 percent — after data
showed US consumer confidence at a new 18-year high in October.
The positive reading sent the dollar up against the yen and the unit
continued to rise in Asia after the Bank of Japan once again lowered its
inflation forecasts, providing a push for Japanese exporters.
The Nikkei in Tokyo jumped 2.2 percent by the close.
In other markets Hong Kong added 1.6 percent and Shanghai closed 1.4
percent higher.
In mainland China, data indicating a slowdown in manufacturing activity in
October was offset by authorities’ support moves including tax cuts, measures
to make it easier for firms to buy back shares and providing liquidity to
markets.
– Sterling pressure –
Sydney rose 0.4 percent, Singapore climbed 1.3 percent and Taipei soared
almost three percent. Wellington and Manila each jumped more than one percent
while Seoul added 0.7 percent and Jakarta gained 0.2 percent.
London opened 1.2 percent higher, while Paris surged 1.6 percent and
Frankfurt added 1.1 percent.
On currency markets the dollar, boosted by a healthy US economy and
expectations of more Federal Reserve rate hikes, was also holding gains
against the euro, which has been hit by weak eurozone growth, German
political uncertainty and Italy’s budget row with Brussels.
MORE/HR/1448
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ASIA-MARKETS-UPDATE 2 LAST NEW YORK
The pound edged up but is at a near three-month low and facing fresh
downward pressure as officials struggle to reach a deal for Britain to leave
the European Union, with just weeks to go before a deadline.
A strong jobs report out of Washington Friday could provide more evidence
for the Fed to hike rates and put further upward pressure on the greenback.
“The deadline for an orderly divorce between the UK and the EU is fast
approaching and neither side seems ready to compromise, increasing the
probabilities of a no-deal exit,” said Alfonso Esparza, senior market analyst
at OANDA.
Oil prices edged up after plunging Tuesday in response to figures showing
a sharp build in US stockpiles.
“US sanctions against Iranian exports kick off next week providing some
support for energy prices,” Esparza said.
But he added that key drivers of the drop in prices has been the weak
growth outlook “and a possible oversupply if Russia and Saudi Arabia, the de
facto leaders of the production limit, increase their supply more than
closing the gap left by lower exports from Iran”.
– Key figures around 0820 GMT –
Tokyo – Nikkei 225: UP 2.2 percent at 21,920.46 (close)
Hong Kong – Hang Seng: UP 1.6 percent at 24,979.69 (close)
Shanghai – Composite: UP 1.4 percent at 2,602.78 (close)
London – FTSE 100: UP 1.2 percent at 7,122.83
Euro/dollar: DOWN at $1.1345 from $1.1346 at 2030 GMT
Pound/dollar: UP at $1.2722 from $1.2708
Dollar/yen: UP at 113.18 from 112.97 yen
Oil – West Texas Intermediate: UP 56 cents at $66.74 per barrel
Oil – Brent Crude: UP 52 cents at $76.43 per barrel
New York – Dow: UP 1.8 percent at 24,874.64 (close)
BSS/AFP/HR/1450