Most Asian markets rise as optimism returns, eyes on trade talks

Hong Kong, Jan 8: Asian markets mostly rose Tuesday with a little more optimism in the air than in recent weeks as China and the US hold trade talks and the Federal Reserve flags a more dovish stance.

Wall Street provided another positive lead, extending Friday's surge, with Chinese monetary easing at the weekend adding to the buying sentiment.

Focus is now on Beijing, where Chinese and American officials were holding a second day of discussions aimed at resolving their almost year-old trade row.

While there is little expectation this week for a full agreement on the issue, which has seen the two sides exchanges tariffs on goods worth hundreds of billions of dollars, there are hopes they can make some headway.

News that top economic negotiator and Vice Premier Liu He was also attending the talks provided some extra support, after Donald Trump on Friday said he thought a deal could be done.

“While we don't expect a full resolution in trade tension between China and the US in the foreseeable future, small steps in progress are likely to be taken favourably by investors,” said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management.

“The latest positive signals from the Trump administration of prospects of reaching some form of agreement and Vice Premier Liu He attending the negotiations should continue to cheer the market in the near term.”

In morning trade, Hong Kong, which jumped almost three percent over the previous two days, edged up 0.1 percent while Tokyo rose 0.8 percent by the break and Sydney was 0.5 percent up.

– Samsung warning –

Singapore added 0.3 percent while Wellington and Jakarta rose but Shanghai fell 0.4 percent, Seoul was off 0.2 percent and Taipei slipped 0.3 percent.

While the mood is somewhat happier than last month, analysts were a little worried by Samsung's forecast of a near-30 percent drop in operating profit for the December quarter.

The South Korean behemoth cited “lacklustre demand in the memory business and intensifying competition in the smartphone business”, fanning worries about the wider technology sector.

Its US rival Apple sent shudders through markets last week when it warned of a bigger-than-expected drop in revenues owing to falling Chinese demand and highlighting the impact of the trade war.

“When Apple sounded the alarm bells for last quarter results, there was some thought the drops in China sales was an anti-Apple backlash due to escalating US-China tensions,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

“But these Samsung results are quite damning suggesting there… (is) a broader-based retail and manufacturer slowdown afoot.”

On currency markets, the dollar saw more selling pressure after Fed boss Jerome Powell said the bank had no “pre-set” plan for raising interest costs and was keeping a close watch on financial developments, fuelling hopes it will slow its pace of hikes.

The greenback was mixed against its major peers but retreated against higher-yielding units including the Australian dollar, Indonesian rupiah, Mexican peso and Russian ruble.

– Key figures around 0230 GMT –

  • Tokyo – Nikkei 225: UP 0.8 percent at 20,199.79 (break)
  • Hong Kong – Hang Seng: UP 0.1 percent at 25,868.71
  • Shanghai – Composite: DOWN 0.4 percent at 2,523.66
  • Dollar/yen: DOWN at 108.56 yen from 108.74 at 2200 GMT
  • Euro/dollar: DOWN at $1.1457 from $1.1472
  • Pound/dollar: UP at $1.2773 from $1.2769
  • Oil – West Texas Intermediate: UP two cents at $48.54 per barrel
  • Oil – Brent Crude: DOWN three cents at $57.30 per barrel
  • New York – Dow: UP 0.4 percent at 23,531.35 (close)
  • London – FTSE 100: DOWN 0.4 percent at 6,810.88 (close)


Posted on: 2019-01-08T08:45:00+05:00