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HONG KONG, April 3 — Asian markets enjoyed another rally today as a report said China and the US were closing in on a deal to end their long-running trade row. The pound extended gains after British Prime Minister Theresa May said she would look…
HONG KONG: Asian markets enjoyed another rally Wednesday as a report said China and the US were closing in on a deal to end their long-running trade row.
The pound held gains after British Prime Minister Theresa May said she would look for another Brexit delay and softened her position on the issue to avert a calamitous no-deal divorce from the European Union.
While Wall Street provided a flat lead, Asian investors built on recent gains, with optimism given an extra boost by a report in the Financial Times saying Beijing and Washington were on course for a historic agreement.
Expectations that the world’s top two economies will eventually sign a deal has been a key driver of a global equities rally this year and the FT article adds to the general sense of hope.
It comes after better-than-expected factory data out of China and the US that eased worries about growth in the global economy, while a dovish turn from central banks has also provided support.
“Recent positives such as the US Federal Reserve pausing their interest rate increases, incremental signs of progress on China-US trade negotiations and a dovish bias from China’s (central bank) to support growth have given investors a sunnier attitude about risk assets,“ Tai Hui, chief market strategist for Asia Pacific at JP Morgan Asset Management, said.
In early trade, Hong Kong was up 1% – having risen for six straight days – Shanghai added 0.3% and Tokyo went into the break 0.8% higher.
Sydney and Singapore each gained 0.7%, while Seoul rose 0.5%. Taipei and Manila were each slightly higher.
May’s Brexit gamble
The pound jumped on Tuesday after May, who is struggling to get her Brexit agreement through parliament, said she would request a second delay to the April 12 divorce day that is “as short as possible and which ends when we pass a deal”.
She also said she would work with the leader of the opposition Labour Party, Jeremy Corbyn, who favours closer ties with the European Union, indicating she is willing to take a softer Brexit than she had hoped.
The news cheered investors who fear the impact of a no-deal exit on the economy.
However, there remains a lot of uncertainty as May’s decision to work with Corbyn fuelled anger among hardline Brexiters in her own party.
“There are still lots of questions what the next steps are, given that the EU has said that the withdrawal agreement is not negotiable, and are only willing to offer an extension on the basis that it leads to a clear outcome,“ warned Oanda senior market analyst Alfonso Esparza.
“Joining Labour could be the first step towards that clarity, but with so many factions remaining it will not be an easy task.”
Oil prices also continued to rise, with both main contracts around five-month highs, on hopes for an easing of China-US trade tensions, upbeat economic data and signs that OPEC and Russia are sticking to their agreed output cuts.
Added to that is the political and economic crisis in Venezuela, where “output has virtually collapsed as power cuts have removed critical oil export facilities from the grid”, said Stephen Innes at SPI Asset Management. — AFP
HONG KONG: Asian markets rallied Monday, building on last week’s healthy gains with investors buoyed by optimism over China-US trade talks and forecast-busting Chinese factory data.
Top negotiators from China and the US flagged progress in last week’s discussions in Beijing on the tariffs row, with another round slated for this week in Washington.
While there have been few details, the general view on trading floors is that the economic superpowers are heading towards a deal that will end a long-running spat that helped sink global markets towards the end of last year.
Confidence an agreement will be reached helped overcome concerns about the world economy that saw a sharp sell-off in equities at the start of last week.
A positive lead from Wall Street was picked up in Asia, with Tokyo ending the morning 2.2 percent higher, Hong Kong adding 1.6 percent and Shanghai climbing 2.3 percent.
Sydney and Singapore each jumped 0.8 percent, while Seoul piled on 1.2 percent, with Taipei and Wellington also in the green.
The rises were supported by a sharp jump in an index of Chinese manufacturing activity, which soothed concerns about the world’s number two economy and a key driver of the global economy.
– EU patience ‘running out’ –
The Purchasing Managers Index for March showed growth in the sector for the first time in four months and was far better than expected.
“The manufacturing print… will go a long way to allaying slowdown fears about China, at least in the short-term as the US-China trade talks move back to Washington this Wednesday,” said OANDA senior market analyst Jeffrey Halley.
Attention once again returns to Britain, where Prime Minister Theresa May failed on Friday to pass her Brexit deal through parliament, stoking uncertainty with just over a week before the deadline for leaving the European Union.
With MPs still unable to agree on a way forward there are fears the country will crash out of the bloc without a deal, putting pressure on the pound.
Lawmakers will hold a series of votes Monday to try to find a majority-backed plan to end the current crisis, though European Commission President Jean-Claude Juncker has said the EU is “running out” of patience as the saga plods on.
“Brexit is a mess, and sterling traders are getting bored with the continued political point scoring that has plagued the whole process,” said James Hughes, chief market analyst at AxiTrader.
“The closer we get to the proposed deadline of April 12 the more volatility we will surely see.”
NEW YORK, March 25 — Wall Street’s main indexes fell today, dragged down by declines in high-growth technology shares, as fears of a global slowdown roiled the market for the second straight session. On Friday, weak factory data from the United…