HONG KONG, July 19, 2018 (BSS/AFP) – Asian markets largely advanced
Thursday, with investor confidence rising as the US Federal Reserve chief
offered an upbeat assessment of the economy despite concerns about a global
trade war.
In his second day of congressional testimony on Wednesday, Federal Reserve
Chairman Jerome Powell expressed optimism over the US economy but cautioned
that the spiralling global trade row was having a negative impact on
companies in the US.
“We hear from our extensive network of business contacts a rising chorus
of concerns,” he said.
US President Donald Trump has imposed steep tariffs on products from China
worth tens of billions of dollars, and has threatened to target hundreds of
billions more, on top of import taxes on steel and aluminium that have
angered allies like the EU.
“Powell was pretty straightforward on the risks from the trade policy
uncertainty though he tried to stay out of the political debate,” said Greg
McKenna, chief market strategist at AxiTrader.
The Fed chief said that US businesses were already being hurt by
reciprocal tariffs on key products, pointing out: “The bottom line is a more
protectionist economy is less competitive, less productive.”
However, he also said that if Trump’s trade policy resulted in lower
tariffs, that would be good for the US economy.
Despite the concerns, Powell’s overall positive assessment saw markets
largely rally in response.
Hong Kong, Tokyo and Sydney gained 0.3 percent. Singapore rose one percent
and Shanghai edged up 0.1 percent. But Manila lost 0.6 percent.
In a sign of worsening tensions, a senior economic adviser to Trump
attacked Chinese President Xi Jinping for blocking an agreement to resolve
the trade dispute.
“I think Xi is holding the game up,” said Larry Kudlow, director of the
White House National Economic Council. “I don’t think President Xi has any
intention of following through on the discussions we’ve made.”
– Oil makes muted recovery –
Oil rose on the back of new data on gasoline inventories, which were lower
than expected.
“The gasoline numbers were marginally optimistic enough to raise supply
concerns”, said Stephen Innes, head of Asia-Pacific trading at Oanda trading
group.
However, with Trump working to lower gasoline prices, and Russia and Saudi
Arabia offering support, “it’s challenging to see today’s gasoline numbers
turning the bearish market’s tide”, Innes warned.
– Key figures at 0300 GMT –
Tokyo – Nikkei 225: UP 0.3 percent at 22,863.30 (break)
Hong Kong – Hang Seng: UP 0.3 percent at 28,203.15
Shanghai – Composite: UP 0.1 percent at 2,790.65
Dollar/yen: DOWN at 112.74 yen from 112.86 yen at 2030 GMT
Euro/dollar: UP at $1.1645 from $1.1639
Pound/dollar: UP at $1.3071 from $1.3069
Oil – Brent Crude: DOWN 5 cents at $72.85 per barrel
Oil – West Texas Intermediate: UP 12 cents at $68.88 per barrel
New York – Dow: UP 0.3 percent at 25,199.29 (close)
London – FTSE 100: UP 0.7 percent at 7,676.28 (close)