Asian markets mostly up as attention turns to US elections

07-Nov-2018 Intellasia | AFP | 6:00 AM Print This Post

Asian markets mostly rose Tuesday as focus turned to the US midterm elections, which could impact Donald Trump’s presidency, while Apple suppliers suffered on reports the tech titan had cancelled plans to ramp up output of its new iPhone.

The US goes to the polls in the first major electoral test for Trump since he took the White House and embarked on an “America First” agenda that has split opinion across the country and globally.

While his tax cuts and deregulation have helped fire the economy and push stock markets to multiple record highs earlier this year, there is a growing concern that his long-running trade row with China is beginning to bite.

The vote has the added twist of an investigation that is looking at whether his campaign colluded with Moscow to win the 2016 election. If the Democrats win both houses of congress, they could push harder for impeachment, fuelling uncertainty.

“These midterm elections carry a sizeable legal risk for the (Republicans) which could dent investor confidence as we will likely hear much more from (Russia probe lead counsel) Robert Mueller sooner rather than later,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

Hong Kong added 0.7 percent, having lost more than two percent on Monday, while Tokyo was up more than one percent thanks to a weaker yen.

Sydney gained one percent and Seoul added 0.6 percent. Wellington rose 0.4 percent and Jakarta climbed 0.1 percent.

However, Shanghai ended down 0.2 percent and Taipei lost 0.7 percent.

In early European trade London and Paris each edged up 0.1 percent, while Frankfurt dipped 0.2 percent

– China ‘ready’ for trade talks –

Hopes that China and the US can resolve their tariff row were given a boost by comments from Chinese vice President Wang Qishan that he felt the two sides would reach an agreement.

“Both China and the US would love to see greater trade and economic cooperation,” he told the Bloomberg New Economy Forum in Singapore.

“The Chinese side is ready to have discussions with the US on issues of mutual concern and work for a solution on trade acceptable to both sides.”

However, Scott Kennedy, deputy director of China studies at the centre for Strategic and International Studies in Washington, warned the row still has some time to run.

“We’re going to see these two sides continue to dig in their heelsboth sides still think they have the upper hand,” he said. “They’ll continue to do this dance, and all of us will continue to watch.”

Technology firms were among the worst performers, with companies that supply Apple taking a hit after a report in Japan’s respected Nikkei business daily said it had told Taiwan’s Foxconn and Pegatron to scrap planned new production lines for the iPhone XR.

Pegatron fell 4.6 percent though Foxconn bounced back to rise 0.2 percent while other tech companies were being sold off.

Alps Electric in Tokyo sank 0.8 percent, Samsung dropped 0.1 percent in Seoul and AAC Technologies was 3.5 percent lower in Hong Kong.

Seoul-listed LG Display was 0.6 percent lower and Japan Display gave back 3.7 percent.

Firms linked to Apple were already under pressure after the US giant last week reported weaker-than-forecast iPhone sales and said it would no longer reveal how many it had shifted in its earnings.

Apple shares have fallen almost 10 percent since Thursday.

Past Tuesday’s elections, traders are looking at the Federal Reserve’s latest policy meeting, which is not expected to see another interest rate hike but will be followed for clues about its plans for future moves.

Expectations of more rises have pushed the dollar higher against its peers, though the pound is enjoying some buying as hopes grow that officials are close to an agreement on a post Brexit-deal for Britain.

– Key figures around 0820 GMT –

TokyoNikkei 225: UP 1.1 percent at 22,147.75 (close)

Hong KongHang Seng: UP 0.7 percent at 26,120.96 (close)

ShanghaiComposite: DOWN 0.2 percent at 2,659.36 (close)

LondonFTSE 100: UP 0.1 percent at 7,112.47

euro/dollar: UP at $1.1410 from $1.1407 at 2130 GMT

Pound/dollar: UP at $1.3059 from $1.3045

Dollar/yen: UP at 113.40 yen from 113.20 yen

OilWest Texas Intermediate: DOWN 24 cents at $62.86 per barrel

OilBrent Crude: DOWN 52 cents at $72.65 per barrel

New YorkDow: UP 0.8 percent at 25,461.70 (close)


Category: FinanceAsia

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