HONG KONG, Sept 28, 2018 (BSS/AFP) – Asian markets rose Friday, tracking a
rally on Wall Street where investors were buoyed by the Federal Reserve’s
positive outlook for the US economy, and oil added to gains with predictions
it could be headed back to $100.
While concerns over the China-US trade row hang in the air, equities
continue to be supported by optimism that the global economy and companies
are in rude health.
That was reinforced by the Fed Wednesday as it lifted interest rates and
indicated more to come over the next year citing the strong labour market and
playing down concerns about vulnerabilities in the financial system.
“One thing that’s telling is the current price action which sees investors
continually coming back for more. That suggests the gushing US economy and
not trade wars, continues to influence investors’ decisions,” said Stephen
Innes, head of Asia-Pacific trading at OANDA.
All three Wall Street indexes ended with gains and Asia followed suit.
Tokyo led the way, ending the morning 1.7 percent higher as exporters were
boosted by the weaker yen, which is at its lowest level against the dollar
this year.
Hong Kong added 0.5 percent, Shanghai gained 0.8 percent, Sydney rose 0.6
percent and Singapore climbed 0.7 percent. Wellington and Taipei each edged
up 0.2 percent while there were also solid performances in Manila and
Jakarta, though Seoul edged slightly lower.
– Euro struggles –
While the prospect of higher US rates has lifted the dollar, the upbeat
mood is also helping emerging market and high-yielding currencies, which have
been swiped in recent weeks by the trade war fears.
The South Korean won, Indonesian rupiah, Thai baht and Mexican peso were
all being bought while the Turkish lira jumped more than one percent, despite
ongoing concerns about the country’s economy.
The euro continued to struggle after losing almost one percent as Italy’s
populist government agreed on a budget deficit target of 2.4 percent of gross
domestic product for next year, fuelling fears of a bust-up with Brussels.
Crude prices extended gains on growing concerns about supplies following a
decision not to increase output by key producers, just as Iran faces export
sanctions and Venezuela continues to be dogged by political and economic
crises.
Also, the US energy secretary this week ruled out using the country’s
emergency stockpiles to ease a prices.
Bloomberg News reported that the chief executive of oil and gas major
Total, Patrick Pouyanne, saw prices swinging to the $100 levels last seen in
mid-2014.
“Everyone’s worried about the tightness in supply at the moment and that’s
continuing to push up prices,” Will Yun, a commodities analyst at Hyundai
Futures, said. “But volatility is coming as we’re still waiting for further
response from the US.”
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 1.7 percent at 24,202.40 (break)
Hong Kong – Hang Seng: UP 0.5 percent at 27,852.25
Shanghai – Composite: UP 0.8 percent at 2,813.63
Euro/dollar: UP at $1.1644 from $1.1641 at 2100 GMT
Pound/dollar: DOWN at $1.3077 from $1.3078
Dollar/yen: UP at 113.55 yen from 113.39 yen
Oil – West Texas Intermediate: UP 17 cents at $72.29 per barrel
Oil – Brent Crude: UP 19 cents at $81.91 per barrel
New York – Dow Jones: UP 0.2 percent at 26,439.93 (close)
London – FTSE 100: UP 0.5 percent at 7,545.44 (close)