Asian markets rally as hopes of a trade deal get an extra boost

05-Mar-2019 Intellasia | AFP | 6:00 AM Print This Post

Asian markets mostly rose Monday on growing optimism for a trade deal between China and the United States after reports said the two sides were close to a breakthrough.

With a busy week of data releases and events coming up, investors got off to a positive start as they cheered stories saying the tariffs stand-off between world’s top two economies that has dragged on global growth could soon be resolved.

The Wall Street Journal said negotiations last month had narrowed key differences and an agreement could be ready for signing at a summit between Donald Trump and Xi Jinping in late March.

The newspaper, as well as Bloomberg News, also said Beijing had tentatively agreed to lower tariffs or ease certain restrictions, work quicker to open up its auto market and increase its purchases of US goods.

In exchange for Chinese concessions, Washington would do away with most of the trade sanctions it imposed last year, the reports said.

Shanghai rose 1.1 percent, while Hong Kong put on 0.5 percent and Tokyo ended one percent higher.

Sydney rose 0.4 percent and Singapore 0.8 percent, while Wellington added 0.7 percent and Manila 0.6 percent.

However, Seoul edged down 0.2 percent while Taipei slipped 0.4 percent.

– ‘Much-needed lift’ –

Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset Management, said that while there were a number of hurdles to a final agreement such as on intellectual property rights, traders were broadly confident.

“Investors are fully aware of these long-term challenges, but a more sustained ceasefire on tariffs will help to reduce business uncertainty. This could provide a much-needed lift to business sentiment and improve growth momentum entering the summer,” he said.

But there were also warnings that investors could be left disappointed.

“With all this positivity comes the risk that the market is buying on this rumour mill and is becoming more exposed should the good news not materialise,” said Neil Wilson, chief market analyst at Markets.com. “March could well come in like a lion and go out like a lamb.”

Focus turns Tuesday to the start of China’s annual National People’s Congress where it will unveil its growth forecast for this year, while dealers will be looking for any measures to stimulate the stuttering economy.

An official in Beijing said Monday that the rubber-stamp legislature will vote next week on a bill that will bring “a fundamental change” for foreign investors, which could help ease trade tensions with the US.

This week also sees the release of Chinese trade data and key US jobs figures, which will provide a fresh look at the state of the US economy and the Federal Reserve’s monetary policy plans.

On currency markets the dollar extended gains against the safe-haven yen as dealers became more confident, while the greenback was down against most high-yielding units including the Australian dollar, South African rand and Thai baht. China’s yuan was holding around eight-month highs.

Adding to dollar weakness were comments from Trump hitting out at a strong currency.

“I want a strong dollar but I want a dollar that does great for our country, not a dollar that’s so strong that it makes it prohibitive for us to do business with other nations and take their business,” he said during a speech at the Conservative Political Action Conference in Maryland on Saturday, according to Bloomberg News.

In early trade London rose 0.3 percent, Frankfurt gained 0.4 percent and Paris put on 0.5 percent.

– Key figures around 0820 GMT –

TokyoNikkei 225: UP 1.0 percent at 21,822.04 (close)

Hong KongHang Seng: UP 0.5 percent at 28,959.59 (close)

ShanghaiComposite: UP 1.1 percent at 3,027.58 (close)

LondonFTSE 100: UP 0.3 percent at 7,127.89

euro/dollar: DOWN at $1.1364 from $1.1366 at 2140 GMT on Friday

Pound/dollar: UP at $1.3233 from $1.3208

Dollar/yen: UP at 111.97 yen from 111.92 yen

OilWest Texas Intermediate: UP 23 cents at $56.03 per barrel

OilBrent Crude: UP 27 cents at $65.34 per barrel

New YorkDow: UP 0.4 percent at 26,026.32 (close)

https://sg.news.yahoo.com/asian-markets-rally-hopes-trade-deal-extra-boost-030239001–finance.html

 


Category: FinanceAsia

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