BIZ-ASIAN STOCK MARKET: Hong kong – Asian markets mostly up but trade war fears keep dealers on edge
HONG KONG (AFP) – Asian equities rose yesterday on bargain-buying after the previous day’s battering, but investors remain anxious as the threat of a China-US trade war hangs over markets.
Shanghai and Hong Kong bore the brunt of the sell-off on Tuesday after Beijing warned it would retaliate in kind to Donald Trump’s threat of tariffs on hundreds of billions of dollars’ worth of Chinese goods, amounting to much of its exports to the US.
The standoff follows weeks of fruitless talks between the world’s two biggest economies, with the White House accusing China of a string of unfair practices including cyber-theft and forced technology transfers that are hurting American jobs and companies.
On Tuesday’s developments surprised many traders who had characterised Trump’s protectionist rhetoric as part of a strategy to get a better deal from China.
Trump senior economic aide Peter Navarro continued the forceful language on Tuesday by saying China had more to lose from a trade war because it shipped more to the US.
He also maintained the administration was acting “to defend the crown jewels of American technology from China’s aggressive behaviour”.
Navarro said the White House was open to talks but warned, “The fundamental reality is talk is cheap. Delay is expensive”.
Still, traders stepped back in to pick up beaten-down equities yesterday.
Hong Kong was up 0.8 per cent in the afternoon after dropping 2.8 per cent on Tuesday, while Shanghai ended up 0.3 per cent – a small dent in the previous day’s 3.8 per cent loss.
Tokyo ended 1.2 per cent higher while Sydney gained by a similar percentage, Singapore added 0.7 per cent and Seoul put on one per cent. There were also gains in Wellington and Bangkok.
In early European trade London rose 0.8 per cent and Frankfurt gained 0.5 per cent.
“Markets are faring much better as investors’ emotions have tempered, but in general, markets remain in wait and see mode,” said Stephen Innes, head of Asia-Pacific trading at OANDA. “Clarity is power but given the lack thereof, it’s a struggle to get back in the saddle as a sense of once bitten, twice shy continues to permeate.
“The spoils of trade war have attracted bargain-hunting but completely trusting the markets in the aftermath of yesterday’s meltdown is bordering on too soon, too quick as sentiment remains very apprehensive.”
Rakuten Securities Australia chief operating officer Nick Twidale added, “Markets are preparing for further downside whilst hoping that the latest salvos from the Trump administration prove to be another ‘negotiating’ tactic.” The dollar clawed back early losses against the yen but analysts warn it is still likely to face further pressure as investors look to the Japanese unit as a point of safety in times of turmoil.
The euro faced more selling following dovish comments about monetary policy from European Central Bank boss Mario Draghi, while the pound was also down against the dollar. /
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