Logo of Phnom Penh Post newspaper Phnom Penh Post - Asian markets up, investors eye US-China row

Asian markets up, investors eye US-China row

Asian markets up, investors eye US-China row

Asian markets mostly rose on Monday but investors were keeping a close eye on the China-US trade row after US President Donald Trump’s optimistic comments on a possible deal were offset by a war of words between his vice president and Chinese President Xi Jinping.

The mood across the region was a little calmer at the start of the week, providing some much-needed support after the volatility of seven days ago, with oil stabilising and the Federal Reserve tempering fears about its plans for interest rate hikes.

US markets provided a positive lead after Trump said Friday that Beijing had made overtures toward resolving their trade war, meaning he might hold off imposing another round of tariffs.

The president’s comments followed an indication from one of his top economic advisers that talks were under way ahead of a planned meeting at the G20 in Argentina at the end of this month.

However, hopes for an early agreement were jolted by a spat at the weekend Apec meeting between Mike Pence and Xi over China’s economic and regional ambitions, with the US vice president mocking Beijing’s “constricting belt” and a “one-way road” initiative.

Xi defended his scheme and hit out at Trump’s “America First” protectionist agenda, saying it was a “short-sighted approach” that was “doomed to failure”.

The stark differences between the two sides meant the Apec gathering ended without a final communique for the first time in its history.

Still, investors in Asia were in a buying mood Monday as they picked up bargains.

Hong Kong rose 0.6 per cent and Shanghai added 0.9 per cent while Tokyo ended 0.7 per cent higher.

Seoul gained 0.4 per cent and Taipei added 0.3 per cent, with Manila jumping two per cent as traders bet a rate hike last week by the Philippines’ central bank would help attract more foreign investment and temper inflation.

However, Sydney and Singapore each dropped 0.6 per cent and Wellington eased 0.2 per cent.

‘Canary in a coal mine’

There was also some support from comments by top Fed officials last week hinting at concerns about the global economic outlook, indicating they see signs of slowing that could affect their plans for raising borrowing costs.

Expectations the US central bank would press ahead with a series of hikes well into next year, making debts more expensive for investors, have helped send global markets down this year.

But while the prospect of slower rate hikes would be cause for celebration, Stephen Innes, head of Asia-Pacific trade at Oanda, sounded a note of caution.

“A Fed pause during a hiking cycle is a very strong ‘canary in a coal mine’ type of signal and could eventually lead a more profound correction lower in US equity markets if the US economy does sputter,” he said.

Oil prices rose more than one per cent, extending gains from the end of last week after major producer Saudi Arabia said it plans to cut output and called on other producers to follow suit.

“Hope is building on Opec Plus [countries] to curb output as oil prices have entered into a bear market, falling over 20 per cent from the peak in early October when Brent was at $86 per barrel,” said Margaret Yang Yan, market analyst at CMC Markets Singapore.

However, the commodity remains under pressure from concerns about global demand and rising output as well as the China-US trade war.

On currency markets the pound managed to hold off falling further as attention turns to British Prime Minister Theresa May’s attempts to win over enough members of her party to push through her Brexit deal.

“This week will be crucial for the May administration,” said Masakazu Satou, senior analyst at Gaiame Online.

“Players are sidelined on pound trading, waiting for results of the deal,” Satou told AFP.

MOST VIEWED

  • Without shoes or a helmet, a young cyclist steals the show

    Pech Theara gripped the curved handlebars of his rusty old bike, planted his bare feet on its pedals and stormed as fast as he could towards the finish line. The odds were against him as the 13-year-old faced off against kids with nicer bikes at

  • Phnom Penh-Sihanoukville expressway on schedule

    The construction of the more than $1.9 billion Phnom Penh-Sihanoukville Expressway has not been delayed despite the Covid-19 pandemic, with more than 26 per cent of the project completed and expected to finish in about two years, according to Ministry of Public Works and Transport secretary of

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there

  • Cambodia lauded for fight against Covid-19

    Cambodia has drawn global accolades for its handling of the Covid-19 pandemic, with a new report finding that the Kingdom has controlled the pandemic better than any other country in Asia. Dr Takeshi Kasai, director of the World Health Organisation’s (WHO) Western Pacific region,