Oct 24, 2019: Most Asian markets rose Thursday following a positive lead from Wall Street, while the pound was marginally higher as traders await the next Brexit move with the EU expected to extend Britain's divorce deadline yet again.
While US earnings on Wednesday were a mixed bag, investors remain broadly upbeat after better-than-forecast results so far have soothed worries about the impact of slowing economic growth on companies.
“People were bracing for the worst” for businesses, Yana Barton at Eaton Vance Management said. “So far we're coming in a little bit better,” she told Bloomberg TV.
In early trade, Hong Kong was up 0.6 percent and Shanghai added 0.3 percent while Tokyo went into the break with gains of 0.6 percent.
Sydney, Singapore, Wellington, Taipei and Jakarta were also well up. Seoul fell, however, as data showed the South Korean economy grew in the third quarter at a slower pace than expected, putting it on course for the worst annual performance since the global financial crisis.
The positive mood comes just as China and the US look to be on track to sign a mini trade deal next month, and setting up talks for the next phase of a wider agreement to end their long-running tariffs war.
Hopes that Britain will leave the European Union with a divorce pact have also improved sentiment.
While Boris Johnson failed to push his agreement with the bloc in time to meet the October 31 cut-off date, he did manage to get MPs to agree to it.
EU leaders are expected to grant a three-month extension, in which time the prime minister could hold a general election he hopes will give him enough lawmakers to easily break the Brexit deadlock.
– Turkish lira rallies –
Sterling, which has seen strong volatility for most of the week was flat Thursday as dealers await their next cue.
“Brexit remains of great concern, and though few developments materialised (Wednesday) the market is maintaining confidence a deal will be coming,” said AxiTrader analyst Stephen Innes.
“Traders are still awaiting the EU decision on whether it will grant a delay until January 31, and under what conditions.”
Oil prices edged down after running up strong gains of more than 2.5 percent Wednesday in response to data showing a slide on US stockpiles as well as a bigger-than-expected fall in gasoline inventories.
However, the selling in Asian trade came as investors remain concerned about the fact that OPEC and other major producers led by Russia had not yet put forward any plans for changes to their output cuts that have helped support prices for years.
On currency markets, the largely positive mood provided a lift to higher-yielding, riskier units such as the South Korean won and Indonesian rupiah.
The Turkish lira was the standout as it rallied more than one percent after Donald Trump ended sanctions on the country that were recently imposed over its operations against Kurdish forces in northern Syria.
He said he was lifting the sanctions because a ceasefire was holding in the area, calling it a “major breakthrough”.
– Key figures around 0230 GMT –
- Tokyo – Nikkei 225: UP 0.6 percent at 22,769.58 (break)
- Hong Kong – Hang Seng: UP 0.6 percent at 26,722.19
- Shanghai – Composite: UP 0.3 percent at 2,950.46
- Pound/dollar: UP at $1.2917 from $1.2912 at 2130 GMT
- Euro/pound: UP at 86.22 pence from 86.19 pence
- Euro/dollar: UP at $1.1138 from $1.1131
- Dollar/yen: DOWN at 108.61 yen from 108.65 yen
- West Texas Intermediate: DOWN 42 cents at $55.55 per barrel
- Brent North Sea crude: DOWN 36 cents at $60.81 per barrel
- New York – Dow: UP 0.2 percent at 26,833.95 (close)
- London – FTSE 100: UP 0.7 percent at 7,260.74 (close)