Asian markets fluctuate as dealers brush off Wall St record

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WT24 Desk

HONG KONG – Asian markets fluctuated Wednesday following a record-breaking close on Wall Street that was fuelled by strong earnings from US big-hitters, AFP reports.

The S&P 500 and Nasdaq scaled all-time highs while the Dow came close
after a string of better-than-forecast results from the likes of Coca-Cola,
Twitter and Lockheed Martin added to a raft of other recent reports that
suggest the economy is in rude health.

Markets welcomed “a really great string of earnings reports, most of them
outpacing expectations, as well as some pretty good commentary on future
estimates from CEOs”, Jim Paulsen, chief investment strategist at Leuthold
Weeden, told Bloomberg News.

“There’s quite a bit of positivity carrying this to new highs.”

However, while Asian dealers were generally upbeat they were unable to use the Wall Street performance to kick on in early trade, with major indexes shifting in and out of positive territory through the morning.

Hong Kong and Shanghai were each down 0.2 percent in the morning while
Tokyo headed into the break flat and Seoul slipped 0.7 percent.

However, Sydney rose one percent as a drop in Australian inflation raised
the chances of an interest rate cut by the country’s central bank. The
reading sent the Australian dollar plunging one percent.

Singapore, Taipei and Manila each rose 0.2 percent, Wellington added 0.7
percent while Jakarta inched up slightly.

– Oil prices retreat after rally –
US Trade Representative Robert Lighthizer and Treasury Secretary Steven
Mnuchin travel to Beijing next week for another round of high-level talks
aimed at resolving their painful tariffs war.

The White House issued a statement saying the latest negotiations “will
cover trade issues including intellectual property, forced technology
transfer, non-tariff barriers, agriculture, services, purchases and
enforcement”, adding that Chinese officials will visit Washington on May 8.

Expectations the talks will eventually end with an agreement between the
economic superpowers has helped fire a rally across world markets this year, with the initial row having been the catalyst for a sharp sell-off at the end of 2018.

On oil markets both main contracts were in retreat a day after hitting
six-month highs on the back of news that Washington would end a waiver for several countries from US sanctions on Iran.

Prices had already been surging thanks to hopes for the China-US talks
and, OPEC and Russia’s output cap, and unrest in Libya and Venezuela.

There is speculation OPEC kingpin Saudi Arabia could step in to fill the
void left in the market by the removal of Iranian crude, which would temper prices.

But SPI Asset Management’s Stephen Innes said Riyadh could balk at such a
move, having opened the taps when the US unveiled sanctions six months ago only to be “hoodwinked” by the waivers.

“If the US is fully committed to their hawkish Iranian pledge… prices
will reprice higher as Saudi Arabia appear tentative about increasing
supplies, while it is unlikely (US) shale can fill the void quick enough,”
Innes said in a note.

“So to what degree oil markets tighten, and how high oil price goes, will
now mostly be dependent on the supply response from OPEC+ group.”

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: FLAT at 22,254.42 (break)

Hong Kong – Hang Seng: DOWN 0.2 percent at 29,901.29

Shanghai – Composite: DOWN 0.2 percent at 3,191.22

Euro/dollar: DOWN at $1.1211 from $1.1224 at 2040 GMT

Pound/dollar: DOWN at $1.2932 from $1.2938

Dollar/yen: UP at 111.88 yen from 111.85 yen

Oil – West Texas Intermediate: DOWN 40 cents at $65.90 per barrel

Oil – Brent Crude: DOWN 44 cents at $74.07 per barrel

New York – Dow: UP 0.6 percent at 26,656.39 (close)

London – FTSE 100: UP 0.9 percent at 7,523.07 (close)

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