ZCZC
BCN-15
ASIA-MARKETS-CORRECTION
CORRECTED: Asian markets ride positive wave on hopes for trade resolution
ATTENTION – CORRECTION: CORRECTS second par to say China’s tariffs are xxx
five to 10 percent xxx sted as sent. Here is a corrected version:
HONG KONG, Sept 19, 2018 (BSS/AFP) – Asian markets rose Wednesday as tit-
for-tat tariffs by China and the United States were considered lighter than
feared, while there are hopes the two sides can eventually hammer out a deal
to avert an all-out trade war.
Donald Trump on Monday said he would press ahead with 10 percent levies on
another $200 billion of imports, sparking a response from Beijing to target
$60 billion of US goods with five to 10 percent taxes.
The developments were a clear step up in the months-long stand-off between
the world’s top economies but analysts said dealers had been expecting the
measures and essentially took the lower rates as a positive sign.
Wall Street’s three main indexes rallied and Asia picked up the baton.
Tokyo ended the morning 1.5 percent higher, with a shift out of the safe
haven yen supporting Japanese exporters, while Hong Kong and Shanghai each
gained more than one percent.
Sydney rose 0.4 percent, Singapore edged up 0.2 percent and Taipei
increased 0.7 percent. Wellington, Manila and Jakarta also posted strong
performances. Seoul was flat.
“The bottom line why the market didn’t react negatively was the lack of
shock and awe given the tariffs were so well telegraphed,” said Stephen
Innes, head of Asia-Pacific trade at OANDA.
Dealers are now keeping an eye on possible talks between Washington and
Beijing after US Treasury Secretary Steven Mnuchin sent an invite to avert a
trade war, which many fear could destabilise the world economy.
“It’s more likely that there will be some negotiated resolution coming
through in the near term,” George Schultze, founder and CEO of Schultze Asset
Management in New York, told Bloomberg TV.
“Cooler heads will eventually prevail because otherwise both sides are
shooting themselves in the foot.”
However, Innes warned of further upheaval for investors.
“Despite the market taking the bluster in stride, history tells us that
tariffs are detrimental for global trade and commerce,” he said. “As such the
current levels of market buoyancy belie the possible groundswell that could
overrun markets.”
On oil markets both main contracts edged down after rallying more than one
percent Tuesday on the back of comments from OPEC kingpin Saudi Arabia that
it is happy with prices rising above $80 a barrel.
On foreign exchanges the broadly upbeat sentiment provided support to
embattled high-yielding and emerging market currencies, with Indonesia’s
rupiah up 0.2 percent, the Australian dollar 0.3 percent higher and the Thai
baht 0.1 percent up.
The Mexican peso, Russian ruble and South African rand were around 0.4
percent up.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 1.5 percent at 23,776.69 (break)
Hong Kong – Hang Seng: UP 1.1 percent at 27,370.81
Shanghai – Composite: UP 1.1 percent at 2,728.43
Euro/dollar: DOWN at $1.1658 from $1.1680 at 2100 GMT
Pound/dollar: DOWN at $1.3142 from $1.3146
Dollar/yen: DOWN at 112.30 yen from 112.33 yen
Oil – West Texas Intermediate: DOWN 15 cents at $69.70 per barrel
Oil – Brent Crude: DOWN 20 cents at $78.83 per barrel
New York – Dow Jones: UP 0.7 percent at 26,246.96 (close)
London – FTSE 100: FLAT at 7,300.23 (close)
BSS/AFP/HR/0952