SYDNEY, April 4 — Asian shares were trying to bounce today as investors underwent another of the mercurial mood swings that have plagued markets recently, and one could prove just as fleeting given simmering fears of a trade war.
Yet trade worries weren’t far away. Late yesterday, the Trump administration announced 25 percent tariffs on US$50 billion (RM193 billion) of annual imports from China, covering around 1,300 industrial technology, transport and medical products.
China’s commerce ministry immediately warned it was preparing countermeasures of equal intensity.
For now, investors were hoping for the best and MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1 per cent.
Japan’s Nikkei added 0.4 per cent and South Korea 0.2 per cent.
Wall Street had rallied as investors looked forward to earnings season while the S&P 500 pushed above a key support level. The Dow rose 1.65 per cent, while the S&P 500 gained 1.26 per cent and the Nasdaq 1.04 per cent.
Amazon.com shares bounced 1.5 per cent on reports the White House would not take action even as Trump continued his attacks on the online retailer.
Factories fade a little
The swing in risk sentiment sucked some strength out of bonds, with yields on US 10-year Treasury debt up five basis points overnight
The Japanese yen also edged back, with the US dollar rising to 106.50 from a low of 105.70 yesterday. The euro eased to US$1.2275 from a top of US$1.2335, while the US dollar index eased a touch to 90.119.
The Canadian dollar hit a nearly five-week high as investors grew more optimistic about the prospect of a Nafta trade deal.
Investors also seemed to be keeping their nerve on the global economic outlook after a host of manufacturing surveys (PMIs) showed some slowing, but from lofty levels in many regions.
“If global PMIs slow and avoid overheating concerns, that is good for risk appetite. If they slow for ‘the wrong reasons’ like trade protectionism, that is much more worrying,” said Deutsche Bank global strategist Alan Ruskin.
“The March data is at the most a very early warning shot for policymakers not to get too complacent on global growth resilience,” he added.
Trade wars were a particular concern for developing Asia where South Korea, Taiwan, Thailand, China, Indonesia, and India reported a slowing in factory activity.
In commodity markets, gold had steadied around US$1,332.56 (RM5,143.98) an ounce having lost 0.6 per cent overnight.
Oil prices bounced modestly after falling sharply on Monday. Brent crude futures gained five cents to US$68.17 a barrel, while US crude rose four cents to US$63.55 a barrel. A board displaying stock prices is seen at the Australian Securities Exchange (ASX) in Sydney February 9, 2018. — Reuters
Source: The Malay Mail Online