HONG KONG, Aug 6, 2018 (BSS/AFP) – Asian markets rose on Monday after a
healthy lead from Wall Street as positive US jobs data trumped fresh trade
war threats, while the yuan extended a recovery after the Chinese central
bank moved to support the unit.
Hong Kong led gains as the week got off to an upbeat start, with dealers
tracking their New York and European counterparts following recent painful
losses.
Data on Friday showed that while the US economy saw a slowdown in jobs
creation in July, the pace of hiring remained strong over the past three
months.
The report also showed wage growth remained tepid, helping temper worries
about an overheating economy.
The result provided some much-needed cheer to markets, which managed to
brush off a warning from Beijing that it would impose new tariffs on $60
billion worth of US goods if Washington pushes ahead with levies on $200
billion of Chinese imports.
Despite reports that unofficial talks have been held between the two
sides, trade tensions continue to rise with a top White House advisor calling
China a bad bet and saying its economy — the world’s second biggest — was
struggling.
Still, equity traders were in a buying mood Monday. Hong Kong piled on
more than one percent while Shanghai added 0.2 percent and Tokyo went into
the break 0.5 percent higher.
Sydney rose 0.7 percent, Singapore jumped more than one percent and Taipei
was 0.3 percent stronger. Jakarta climbed 0.7 percent despite an earthquake
that rattled the island of Lombok, killing dozens of people.
– Pound struggles –
Support also came from the People’s Bank of China decision late Friday to
unveil measures making it harder to bet against the yuan, which has suffered
steep losses the past two months.
The currency, which is around lows not seen for more than a year, bounced
back soon after the announcement and it extended the gains Monday.
The bank’s measure was similar to a move when the currency went into
freefall following a devaluation three years ago that rattled global markets.
However, analysts were lukewarm on the move with some saying it indicated
Chinese leaders were growing increasingly worried about the unit’s
depreciation.
“The yuan kept falling when China did this last time in 2015, so I don’t
think the PBoC’s move will significantly change the market tone,” Hao Hong,
chief strategist at Bocom International Holdings, told Bloomberg News.
“No matter what happened over the weekend, the weakness in Chinese stocks
may continue. The trade war is nowhere near its end and China’s economy is
slowing down, so why would the trend reverse?”
In other forex trading, the pound was fighting to recover from Friday’s
sell-off that came after Bank of England boss Mark Carney warned the chances
of leaving the EU without a proper deal was “uncomfortably high” and “highly
undesirable”.
While he said such a situation was still “unlikely” compared with other
outcomes, the comments come as leaders on both sides are struggling to reach
a compromise with just months to go before Britain is due to formally exit.
The remarks sent sterling tumbling, with an interest rate hike last week
unable to provide any support.
– Key figures at 0300 GMT –
Tokyo – Nikkei 225: UP 0.5 percent at 22,626.56 (break)
Hong Kong – Hang Seng: UP 1.2 percent at 28,008.62
Shanghai – Composite: UP 0.2 percent at 2,745.04
Euro/dollar: DOWN at $1.1563 from $1.1567 at 2100 GMT on Friday
Pound/dollar: DOWN at $1.2996 from $1.3005
Dollar/yen: DOWN at 111.20 yen from 111.25 yen
Oil – West Texas Intermediate: UP 18 cents at $68.67
Oil – Brent Crude: UP 15 cents at $73.36 per barrel
New York – Dow Jones: UP 0.6 percent to 25,462.58 (close)
London – FTSE 100: UP 1.1 percent at 7,659.10 (close)