Wall Street gains boost Asian shares up but China concerns cap earnings

09.12.2019 - Kulakov Vladimir
Wall Street gains boost Asian shares up but China concerns cap earnings

SYDNEY-Majority of Asian stocks hiked up on Monday from Wall Street’s well-ended performance after strong US jobs data. However, regional shares were restricted due to pressing issues of China’s economic slowdown brought by months-long Sino-US trade truce.

Japan’s benchmark Nikkei .N225 acquired 0.4% while MSCI’s largest Asia Pacific index shares .MIAPJ0000PUS earned 0.3%, with Australian stocks and South Korean KOSPI .KS11 clocked in 0.4 and 0.3 respective gains.

China’s Shanghai Composite .SSEC ended firmly as Hong Kong’s Hang Seng index .HSI acquired 0.2%.

Wall Street ended an inch closer to hitting its record high on Friday brought by strong jobs data and some upbeat signals about the US-China trade talks, with benchmark S&P 500 .SPX 0.2% ending inside 0.2% of its highest record in late November.

U.S. jobs have expanded by most in 10 months in November as healthcare sector facilitated intensive hiring and production workers at General Motors went back to work following strike. Such indicated that the world’s biggest economy is not fluctuating.

“This economy is still climbing and shattering the records for longevity,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “Right now, the clouds of recession still remain well offshore despite troubled economies elsewhere in the world and a trade war.”

White House economic adviser Larry Kudlow stated last Friday that US will carry on imposing tariffs on Chinese goods effective on Dec. 15 as planned.

Though US President Donald Trump likes trade talks’ recent development, investors viewed that things may reverse if trade tensions press harder, especially that Trump is firm with imposing tariffs on $156 billion worth of Chinese goods mid-December.

China’s exports plummeted for four straight months in November, bringing more worries to market already anxious about the implications of trade war to global growth. Despite negative signals, growth imports were more upbeat as Beijing’s stimulus efforts were negating risks.

“Although the trade data did not have much impact, concerns about slowing growth and a lack of government stimulus are capping the Chinese shares’ upside,” said Naoki Tashiro, president of TS China Research.

“Yet chip-related shares are doing well, suggesting investors are still positive on the outlook of Sino-U.S. trade talks overall.”

U.S. treasury advanced on positive employment data with benchmark 10-year notes hitting 1.843% US10YT=RR.

The Federal Reserve’s Open Market Committee (FOMC) started its two-day policy convention on Tuesday as the central bank is viewed to emphasize the economy’s performance while binding interest rates at bay, ranging from 1.50% to 1.75%.

Oil prices rested after weeks of high but placed well near its highs following OPEC’s scheme of cutting 500,000barrels per day next year.

U.S. West Texas Intermediate (WTI) crude CLc1 shed 0.5% to $58.92 a barrel while Brent futures LCOc1 sunk down with 0.3% loss at $64.21 per barrel.

Dollar recorded a consistent positive performance on Monday with greenback quoted 97.7125 against major peers as euro changed minimally equivalent to $1.1055.

The dollar was also quoted 108.60 per yen as British pound traded at $1.3142 GBP=D4, close enough from its seventh month peak of $1.3166 last Thursday.

Expectations that Prime Minister Boris Johnson’s party will win in the upcoming poll on Thursday prompted sterling’s positive performance as it cancelled hung parliament and Brexit’s political stagnation.


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