Asian markets rise ahead of key meetings in China and US

18-Dec-2018 Intellasia | AFP | 6:00 AM Print This Post

Asian markets mostly rose Monday as traders look ahead to a key meeting of the Federal Reserve, and a Chinese policy-setting conference this week.

However, there is still caution on trading floors after Friday’s sharp sell-off fuelled by concerns over China’s economy, and despite a tweet from Donald Trump suggesting a trade deal could be hammered out between Washington and Beijing.

While there are signs the world’s top two economies are beginning to move towards a resolution in their bitter tariffs spat, there are increasing concerns about the global outlook following another dour set of indicators out of China.

A string of below-par readings this year have highlighted a slowdown in the Asian giant and observers are forecasting leaders will unveil fresh measures to pep up the economy, which is on course for another year of relatively weak growth.

A speech from President Xi Jinping on Tuesday to mark 40 years since China’s economy began opening up will be closely watched, and that is expected to be followed by the start of a conference setting out the country’s 2019 economic plan.

“We should expect a raft of stimulus measures from China policymakers in an attempt to stabilise the domestic economy,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

The Fed will conclude its rate-setting policy meeting Wednesday and while expectations are for another hike in borrowing costs, comments from chair Jerome Powell will be closely watched for an idea of its plans for 2019.

‘ A lot of volatility’ –

In light of the China-US trade row and signs of weakness in the global economy, the bank has sounded a little more dovish in recent weeks, fuelling speculation it will slow down its pace of rate hikeswhich has provided some much-needed support to equities.

“The upcoming (Fed) meeting and China’s policy-setting meeting have been the most actively discussed topics around the markets,” Innes added. “And both events have a smoothing effect on risk sentiment.”

Shanghai climbed 0.2 percent and Tokyo finished 0.6 percent higher, while Sydney put on one percent and Singapore jumped 1.2 percent.

Seoul and Taipei each gained 0.1 percent while Wellington added 0.3 percent. There were also gains in Mumbai and Manila, though Hong Kong inched down marginally.

In early European trade London dipped 0.1 percent, Paris dropped 0.3 percent and Frankfurt eased 0.2 percent.

Steve Goldman, fund manager at Kapstream Capital, told Bloomberg TV in Sydney that “we’re going to see a lot of volatility” in the new year because of global uncertainty.

Hopes that China and the US can reach a deal to end their trade war were given a boost by Trump Friday, when he tweeted: “China wants to make a big and very comprehensive deal. It could happen, and rather soon!”

That came after China earlier in the day backed off fresh levies imposed this summer on US-made cars and auto parts.

While a full-blown deal is some way off, the developments have provided some hope to dealers.

On currency markets the pound remains bogged down around 20-month lows as prime minister Theresa May struggles to win concessions from EU leaders over her Brexit agreement, which a majority of lawmakers in Westminster oppose.

Facing growing calls for another referendum to break the deadlock, May is expected to tell MPs that such a move will do “irreparable damage” to British politics.

However, with her agreement all but dead in the water, there is a growing expectation Britain will leave the EU without a deal, which commentators warn could hammer the British economy.

– Key figures around 0820 GMT –

TokyoNikkei 225: UP 0.6 percent at 21,506.88 (close)

Hong KongHang Seng: FLAT at 26,087.98 (close)

ShanghaiComposite: UP 0.2 percent at 2,597.97 (close)

LondonFTSE 100: DOWN 0.1 percent at 6,839.45

Pound/dollar: UP at $1.2584 from $1.2582

euro/dollar: UP at $1.1319 from $1.1303

Dollar/yen: UP at 113.42 yen from 113.39 yen

OilWest Texas Intermediate UP 12 cents at $51.32 per barrel

OilBrent Crude: UP 12 cents at $60.40 per barrel

New YorkDow: DOWN 1.7 percent at 24,168.96 (close)–finance.html


Category: FinanceAsia

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