POST TIME: 11 July, 2018 00:00 00 AM
Asian markets mostly up as trade woes give way to earnings hopes

Asian markets mostly up as trade woes give way to earnings hopes

A man walks past a stock indicator showing share prices of US companies in Tokyo. AFP PHOTO

Asian markets mostly rose yesterday following another strong lead from New York, as optimism about the US economy and the beginning of the earnings season provide a distraction from trade tensions, reports AFP from Hong Kong.

After weeks of losses across the world, investors moved back in on Friday as the tit-for-tat tariffs between Beijing and Washington had already been factored in and attention shifted to US jobs and corporate results.

Wall Street’s three main indexes closed with more healthy gains Monday, building on a rally that has been given life by another forecast-busting US jobs report.

“For a change, all is quiet on the ... trade war front as the drop in aggressive US tariff posturing and the (jobs data) after effects have propelled US equity markets to their third consecutive day of substantial gains,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“For the time being robust US economic data is offsetting concerns about rising trade tensions.”

However, he added a word of warning that “markets remain deceptively tricky and could be even more so as we enter the US dog days of summer”.

The positive sentiment and US economic optimism has lifted the dollar against the safe haven yen, helping Tokyo’s Nikkei end 0.7 per cent higher.

Shanghai added 0.4 per cent and Singapore one percent. Seoul gained 0.4 per cent, Taipei edged 0.3 per cent higher, while Manila and Jakarta were also well up. Hong Kong pared early gains to end flat after a two-day advance.

In early European trade London and Frankfurt each rose 0.1 percent, while Paris added 0.2 percent.

Rodrigo Catril, senior strategist at National Australia Bank, said: “No new news from the US-Sino trade war has helped investors focus back on fundamentals and with the US earnings season starting later this week, the US has led the gains in equities overnight.”

The reporting season for April-June kicks off in the US this week and there are hopes another outstanding set of reports can put some fizz back into world markets.

Also on the radar this week is the release of Chinese trade data, which will be pored over for an idea about what impact the ongoing row with the US has had so far on the world’s number two economy.

On currency markets the pound is holding up against the dollar after tumbling Monday in reaction to news that Britain’s Foreign Secretary Boris Johnson had resigned citing his displeasure at a cabinet post-Brexit deal that aims for a “soft” exit.

While the pro-Brexit minister had been seen as a thorn in Prime Minister Theresa May’s side, observers said the news increases the chances she will face a possible leadership challenge, throwing Britain into fresh turmoil and the possibility of another general election.

His decision came hours after May’s point man on Brexit talks with the EU also stepped down over the agreement.

Catril added: “Overall, while May’s move to a softer Brexit is a positive, there are still a lot of uncertainties. Political uncertainty remains a big cloud over the pound, making it a dangerous currency to trade and this is unlikely to change any time soon.”

Oil prices rose again on expectations of US sanctions on key producer Iran, clashes in Libya that are choking output there and ongoing political and economic uncertainty in Venezuela.