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Most Asian markets rise, energy firms hit by oil demand fears
HONG KONG, May 2, 2019 (BSS/AFP) – Most Asian markets rose Thursday as
forecast-beating earnings from Apple provided a much-needed bounce for the
tech sector, though energy companies dropped on concerns about slowing US oil
demand as supplies climb.
Investors ignored a retreat on Wall Street, where all three main indexes
were weighed by disappointment that the Federal Reserve brushed off weak
inflation and dented hopes for a possible interest rate cut.
Regional traders were in buying mood as most of the region returned from
the May Day break looking to jump back into technology again after Apple
surged 4.9 percent on better-than-expected quarterly results.
The result was welcome news after Google parent Alphabet and Samsung
Electronics surprised on the downside and sparked a sharp sell-off in the
sector.
Hong Kong-listed AAC Technologies jumped almost three percent and market
heavyweight Tencent added 0.4 percent while Apple supplier Foxconn and Taiwan
Semiconductor were also well up in Taipei.
The gains were reflected on stock markets with Hong Kong up 0.6 percent by
lunch, Seoul and Taipei each up 0.4 percent and Wellington rising 0.5
percent. Manila and Bangkok also climbed but Sydney slipped 0.7 percent and
Singapore was off 0.5 percent.
Tokyo and Shanghai were closed for public holidays.
Investors remain on edge over the global outlook, which has rattled
markets in recent weeks, with the US economy performing broadly better than
elsewhere.
The positive performance in Asia came despite the negative lead from New
York, where traders were jolted by Fed boss Jerome Powell’s assessment of
recent weak inflation as being only “transitory”.
– Powell disappoints –
The comments came after the Fed’s latest policy meeting and sank faint
hopes the bank would announce a rate cut later in the year. It also went
against a call from Donald Trump to ease borrowing costs to help bolster the
economy.
And OANDA senior market analyst Edward Moya said there was little chance
of such a move any time soon.
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“The press conference delivered a clear message that rate cuts are not
happening anytime soon as inflation should pick up,” he said in a note.
“The expectations for healthier growth later in the year, however, suggest
the downside risks are fading. If we see this patient period end with
stronger momentum, the Fed may need to reconsider tightening if we do see
that pick up with inflation.”
And JP Morgan Asset Management global market strategist Kerry Craig added:
“Powell may have to work on his bedside manner. In this case, the patient
(i.e. markets) thought their diagnosis would merit stronger medicine, but
instead all the they got was a prescription to ‘be patient’.”
Adding to the upbeat mood was optimism over the China-US trade talks, with
Treasury Secretary Steven Mnuchin describing a high-level two-day meeting in
Beijing as “productive”.
Chinese negotiators head to Washington next week for another round, with
CNBC citing unnamed sources as saying a deal could be signed next Friday.
The Fed’s refusal to hint at a rate cut pushed the dollar up against the
yen and most higher-yielding currencies, though it was slightly lower against
the pound and euro.
Oil extended losses after US crude inventories and production jumped,
overshadowing concerns about the end of US waivers on countries buying
Iranian oil and Venezuela’s deepening political crisis.
The drop in crude prices hit energy firms, with CNOOC down more than two
percent in Hong Kong and PetroChina 1.6 percent off while Woodside Petroleum
and Santos each fell 0.6 percent in Sydney.
– Key figures around 0430 GMT –
Hong Kong – Hang Seng: UP 0.6 percent at 29,887.13 (break)
Shanghai – Composite: Closed for holiday
Tokyo – Nikkei 225: Closed for holiday
Pound/dollar: UP at $1.3060 from $1.3045 at 2050 GMT
Dollar/yen: UP at 111.61 from 111.16
Euro/dollar: UP at $1.1209 from $1.1192
Oil – West Texas Intermediate: DOWN 15 cents at $63.45 per barrel
Oil – Brent Crude: DOWN 19 cents at $71.99 per barrel (new contract)
New York – Dow: DOWN 0.6 percent at 26,430.14 (close)
London – FTSE 100: DOWN 0.4 percent at 7,385.26 (close)
BSS/AFP/HR/1100