TOKYO, Aug 14 ― Asian stocks joined a global equities surge today, after Washington delayed tariffs on some Chinese imports and gave much-needed relief for markets gripped by political and economic turmoil.
Wall Street stocks soared overnight as US President Donald Trump backed off his September 1 deadline for 10 per cent tariffs on the remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods in the hopes of blunting their impact on US holiday sales.
The Shanghai Composite Index advanced 0.6 per cent while Hong Kong’s Hang Seng, which has been hurt by disruptions from large anti-government protests, rose 0.5 per cent.
South Korea’s KOSPI advanced 0.8 per cent and Japan’s Nikkei rose 0.6 per cent.
Yet today’s bounce hardly clawed back the sizable losses for equities over recent months, and broad market sentiment remained fragile given that the US-China trade conflict is still far from resolved.
Uncertainty around political risks such as the unrest in Hong Kong also continue to keep investors on edge.
Kenta Inoue, senior market economist at Mitsubishi UFJ Morgan Stanley Securities, pointed out that Trump’s tariff delay came just as US stocks were stalling.
“This appears to be a routine ploy by the US president, who applies trade pressure on China when stocks are doing well and opts for compromise when they are not,” Inoue said.
The S&P 500 advanced to a record high at the end of July, but it has lost momentum due to factors including US-China trade angst. The index rose 1.5 per cent yesterday, but is still down 1.8 per cent in August.
The year-long tariff dispute between the world’s biggest economies has already disrupted global supply chains and slowed economic growth.
Growth of China’s industrial output slowed much more than expected to 4.8 per cent in July from a year earlier, official data showed today, in the latest sign of faltering demand as the United States ramps up trade pressure. July’s pace was the slowest since February 2002.
“President Trump did delay the tariffs and while this is positive for equities, the markets will remain wary of the tariffs still being implemented come December,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
“And while the tensions in Hong Kong are not a main calibre theme for all markets, their negative impact has been multiplied as they have taken place simultaneously with developments in Argentina.”
Fears of a possible return to interventionist policies, and by extension a possible debt default, jolted global markets this week after conservative Argentina President Mauricio Macri was handed a trouncing by the opposition in presidential primaries over the weekend.
In currencies, the safe-haven yen advanced 0.45 per cent to 106.260 per dollar as market participants took a sceptical view of Trump’s decision to delay tariffs on some Chinese goods.
In volatile trading, the yen retreated to 106.980 per dollar overnight before finding its footing. On Monday, the Japanese currency had brushed a seven-month peak near 105.000.
The dollar index versus a basket of six major currencies inched down 0.05 per cent to 97.759 after advancing nearly 0.5 per cent the previous day.
The euro was steady at US$1.1175 (RM4.679) after slipping 0.4 per cent against the dollar yesterday.
The greenback’s advance stalled as the sharp rise in US yields seen overnight ran out of momentum.
The 10-year US Treasury note edged down 2.5 basis points to 1.676 per cent after climbing 6 basis points overnight. The yield had plumbed a three-year low of 1.595 per cent a week ago.
Brent crude oil futures were down 0.83 per cent at US$60.79 per barrel, losing steam after soaring nearly 5 per cent the previous day.
Crude prices jumped yesterday as Washington’s decision to delay imposing some tariffs eased worries about a global economic slowdown, at least for the time being. ― Reuters
Source: The Malay Mail Online