HONG KONG: Asian markets mostly rose yesterday as dealers await the latest developments in the China-US trade talks, while investors look ahead to a key European Union summit that will decide Britain’s immediate future in the bloc.
While the broad trend remains upwards, sentiment was given a knock by news that US President Donald Trump had trained his sights on the EU by threatening tariffs on billions of dollars’ worth of goods.
Earnings season also kicks off in earnest this week, with expectations low but observers hoping for some positive forward guidance.
Beijing and Washington have flagged progress in trade negotiations, helping global markets push to multi-month highs this year, though there have been few details.
“Global growth concerns are easing as US-China appear to be close to a deal, but without details and with veiled threats if the deal is not (the) best, markets are treading carefully,” said OANDA analyst Alfonso Esparza.
Hong Kong was ended up 0.3 percent, while Tokyo finished 0.2 percent higher.
Seoul added 0.1 percent, while Sydney was marginally higher with Taipei, Bangkok and Jakarta also up.
However, Shanghai and Wellington each ended down 0.2 percent, while Mumbai was off 0.1 percent.
In early European trade London and Frankfurt each dipped 0.2 percent, while Paris slipped 0.1 percent.
Trading was hit by news that the US had threatened levies on up to $11.2 billion of a host of European products in response to subsidies received by aircraft maker Airbus as part of a long-running row.
The move comes as Brussels and Washington are on the verge of a stand-off over the auto sector, while Trump has also warned of action against Japan as part of a multi-pronged trade fight that has shaken investor confidence.
“Whilst at present it looks like a relatively contained problem relating to the ruling on Airbus subsidies, there is a risk of contagion if the EU decides to respond in kind,” said Neil Wilson, chief market analyst at Markets.com.
“Moreover, it will not do anything to improve business sentiment in the eurozone, and we must assume that the (European Central Bank) will take a rather dim view of the situation with regards the growth outlook.”
On currency markets the pound was standing its ground despite Brexit uncertainty, with Prime Minister Theresa May holding a series of meetings with EU leaders to win backing for a second delay to Britain’s exit from the bloc. –AFP
