HONG KONG, Sept 20, 2019 (BSS/AFP) – Asian markets edged up Friday as
investors turn their attention to the China-US trade talks, while keeping an
eye on the Gulf region after last week’s air strikes on Saudi oil facilities
fanned geopolitical tensions.
With a delegation from China in the US to prepare for higher-level
negotiations next month, there are hopes the economic powerhouses can find a
solution to their tariffs row that has dragged on the global economy for a
year.
Stock markets have enjoyed a broadly positive September thanks to hopes for
the talks, with both sides appearing to offer olive branches and sounding
less confrontational than they did in July and August.
A shift by central banks to easier monetary policies — or a desire to do
so — is providing some much-needed support to equities, though there was
some disappointment in the Federal Reserve’s lack of forward guidance this
week for further interest rate cuts.
Still, there is an expectation that more measures were likely on the way,
with Kate Warne, investment strategist at Edward Jones, telling Bloomberg TV:
“There’s a lot more monetary stimulus coming into the system.”
In early trade Hong Kong rose 0.3 percent after a four-day sell-off, though
investors are on alert for further protests in the city following clashes
between pro-democracy demonstrators and police last weekend. Shanghai also
added 0.3 percent and Tokyo went into the break 0.4 percent higher.
– ‘Dangerous game’ –
Sydney gained 0.7 percent as investors grow optimistic the Australian
central bank will cut interest rates again at its next policy meeting, while
Seoul and Taipei added 0.2 percent. Singapore edged up 0.1 percent and
Wellington put on 0.4 percent.
However, traders are on edge in case of further attacks on Saudi Arabia at
the weekend following the devastating strikes that crippled two of its
biggest oil plants on Saturday and sent the price of crude soaring.
Both main contracts stabilised this week after the initial shock but there
are worries of a possible conflict after the US and Saudi Arabia pointed the
finger at Iran and said they were considering their response.
Adding to concerns, Iran’s Foreign Minister Mohammad Javad Zarif warned
Thursday that any military strike on the country could lead to “all-out war”.
“It is hard to see oil markets wanting to sell crude heavily ahead of the
weekend and the event risk that entails,” said Jeffrey Halley, senior markets
analyst at OANDA.
“In fact, that would be a very dangerous game as the threat of more attacks
from Iran or its proxies have, if anything, increased, not decreased given
the enfeebled global response this week.”
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 0.4 percent at 22,142.42 (break)
Hong Kong – Hang Seng: UP 0.3 at 26,563.22
Shanghai – Composite: UP 0.3 percent at 3,007.28
Euro/dollar: UP at $1.1052 from $1.1043 at 2030 GMT
Dollar/yen: DOWN at 107.93 yen from 108.03 yen
Pound/dollar: UP at $1.2526 from $1.2523
Euro/pound: UP at 88.23 pence from 88.12 pence
West Texas Intermediate: UP 64 cents at $58.77 per barrel
Brent North Sea crude: UP 48 cents at $64.88 per barrel
New York – Dow: DOWN 0.2 percent at 27,094.79 (close)
London – FTSE 100: UP 0.6 percent at 7,356.42 points (close)