Asian markets, currencies boosted by trade optimism

935

HONG KONG, Feb 20, 2019 (BSS/AFP) – Growing optimism that China and the
United States will reach a trade deal lifted most Asian equities Wednesday
while the positive sentiment also provided support to regional currencies
against the safe-bet dollar.

The yuan was among the big gainers following a report that the US has
called on China to stabilise the unit as part of any agreement between the
world’s top economic powers.

Wall Street returned from a long weekend to provide a healthy lead as US
President Donald Trump said trade talks — which resumed in Washington
Tuesday — were “going very well” but are “very complex”.

He also indicated he could put back the March 1 deadline for talks to be
concluded — when US tariffs on Chinese goods are due to more than double —
saying it is “not a magical date”.

Observers say that while there are no details about the negotiations the
fact they are still talking and China appeared responsive to the call for
yuan stability was good news.

Hong Kong led gains, rising 1.2 percent while Shanghai added 0.2 percent
and Tokyo ended the morning session 0.7 percent higher.

Seoul climbed more than one percent, Singapore put on 0.6 percent, Taipei
added 0.9 percent and Wellington 0.3 percent. Manila piled on one percent but
Sydney slipped 0.3 percent.

The upbeat mood on trading floors gave investors confidence to buy higher-
risk currencies, pushing the South African rand more than one percent higher
and Australia’s dollar up 0.8 percent. The yuan climbed 0.7 percent.

Hopes that Prime Minister Theresa May could win changes to her Brexit deal
with the European Union as she heads to Brussels Wednesday boosted the pound
more than one percent.

While EU leaders have said they are not willing to bend on the agreement,
analysts say there could be some movement that would help her push it through
parliament and avoid a messy divorce that could hammer the British economy.

“The EU is showing some possible concessions about the timing of the exit,
as (European Commission chief) Jean-Claude Juncker has said a delay beyond
the European parliamentary elections in May would not be opposed, but the UK
has to request it, which they have not done,” said Alfonso Esparza, senior
market analyst at OANDA.

– Key figures around 0250 GMT –

Tokyo – Nikkei 225: UP 0.7 percent at 21,452.25 (break)

Hong Kong – Hang Seng: UP 1.2 percent at 28,571.27

Shanghai – Composite: UP 0.2 percent at 2,760.57

Euro/dollar: UP at $1.1370 from $1.1342 at 2130 GMT Monday

Pound/dollar: UP at $1.3068 from $1.3062

Dollar/yen: UP at 110.81 yen from 110.58 yen

Oil – West Texas Intermediate: DOWN 20 cents at $55.89 per barrel

Oil – Brent Crude: DOWN 25 cents at $66.20 per barrel

New York – DOW: FLAT at 25,891.32 (close)

London – FTSE 100: DOWN 0.6 percent at 7,179.17 (close)