HONG KONG, June 29, 2018 (BSS/AFP) – Asian markets fluctuated through the
morning as investors headed for the end of a tumultuous quarter that has seen
sharp losses around the world, with China-US trade tensions showing no sign
of calming.
Trading floors have witnessed heavy selling in April-June as the two
biggest economies exchanged threats of tariffs — and in some cases imposed
them — on billions of dollars of imports, fuelling fears for global growth.
An increasing source of concern for many investors is China, where the
main stock market is in bear territory after losing more than 20 percent from
a recent peak and the yuan continues to struggle.
Many analysts warn that any trade war with the US would likely hurt
Beijing more, with growth already showing signs of slowing this quarter and
authorities looking to provide support.
That comes just as the US perks up with the Federal Reserve expected to
press ahead with interest rate hikes this year and next, and expansion likely
to impress further.
The ongoing US strength “implies that the Fed will keep hiking rates
because it will need to”, said Greg McKenna, chief market strategist at
AxiTrader.
“It implies that bonds will continue to have an upward bias, it implies
that earnings for US companies should do OK, and it implies that the US will
stand out as an investment destination as the de-synchronisation of global
growth sees other blocs and nations lag behind.”
With investors uncertain about the next moves by Donald Trump, markets are
swinging back and forth despite a positive lead from Wall Street, where all
three main indexes ended with gains.
Tokyo ended the morning session 0.3 percent lower, though electronics
giant Sharp soaring more than 14 percent after saying it would cancel a plan
to raise some $1.8 billion through a public offering, citing the China-US
trade frictions.
Hong Kong Kong was up 0.4 percent in early trade and Shanghai added 0.3
percent.
Wellington, Taipei and Manila were all up but Sydney slipped 0.1 percent,
Singapore shed 0.2 percent and Seoul dropped 0.7 percent.
On currency markets the dollar rose against most high-yielding currencies,
with the yuan extending losses, which has led some observers to suggest China
is looking to weaken the unit in preparation for the impact of a possible
trade war.
Energy firms in the region struggled to maintain their strong upward
momentum from earlier in the week, despite another rise in oil prices
Thursday and lingering optimism about demand after data showed a huge drop in
US stockpiles.
Both main oil contracts were down Friday but have risen sharply since last
week, with dealers cheered by a modest lift in an output cap by OPEC and
Russia.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.3 percent at 22,194.21 (break)
Hong Kong – Hang Seng: UP 0.4 percent at 28,621.86
Shanghai – Composite: UP 0.3 percent at 2,795.19
Euro/dollar: UP at $1.1569 from $1.1564 at 2030 GMT
Pound/dollar: DOWN at $1.3074 from $1.3076
Dollar/yen: UP at 110.55 yen from 110.53 yen
Oil – West Texas Intermediate: DOWN 28 cents at $73.17 per barrel
Oil – Brent Crude: DOWN 25 cents at $77.60 per barrel
New York – Dow Jones: UP 0.4 percent at 24,216.05 (close)
London – FTSE 100: DOWN 0.1 percent at 7,615.63 (close)