Asian stock exchanges bounce from three-and-a-half month lows as trade fears fade

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TOKYO (Reuters) – Asian markets rebounded from a low of three and a half months on Wednesday, as a slight softening of US President Donald Trump's rhetoric eased concerns over the US-China tariff war and expectations that Beijing could release further economic stimuli.

FOTO FILE: employees of the Tokyo Stock Exchange (TSE) work at the Tokyo Stock Exchange, Japan, 11 October 2018. REUTERS / Issei Kato / File Photo

Equities in Asia were driven by strong gains in Chinese stocks, which rebounded after two days of losses.

"Chinese stocks are bouncing as they had been oversold in recent sessions. Sentiment is even better as President Trump seems to want a compromise," said Kota Hirayama, senior economist of emerging markets at SMBC Nikko Securities in Tokyo.

MSCI's broader index of Asia-Pacific equities outside Japan gained 0.5%. The index had fallen to its lowest level since the end of January the previous day, while the trade conflict between China and the United States had intensified. On Monday, Beijing imposed an increase in tariffs on US assets following last week's Washington decision to increase its levies on Chinese imports.

However, Trump said he had a "very good" dialogue with China and insisted that talks between the two largest economies in the world did not collapse. Wall Street shares were able to bounce overnight in the wake of Trump's comments. (.N)

The Shanghai composite index gained 1%, shaking off concerns over economic growth after weaker than expected Chinese data published Wednesday.

China's industrial production growth slowed in April from a high of 4-1 / 2 years in March, while the increase in retail sales missed out on forecasts.

"The latest data show that the Chinese economy still needs stimulation. Its stock markets could support its recovery if the government indicates that it will continue to support the economy," Hirayama told SMBC Nikko Securities.

Australian shares added 0.6%, South Korea's KOSPI gained 0.7% and the Japanese Nikkei fell 0.1%.

The Chinese yuan was a stronger shadow at $ 6,9005 for offshore trade, after coming out of a 5-month minimum of 6.9200 established Tuesday.

The dollar remained stable at 109,615 yen, after falling from a three-month low of 109,020 probed on Monday, when concerns over trade warfare increased investor demand for the safe-haven Japanese currency.

The euro remained unchanged at $ 1,1204. The common currency decreased by almost 0.2% the day before after the Italian Deputy Prime Minister declared that the country is ready to break the rules of the European Union budget on debt levels, if necessary, for stimulate employment.

The dollar index against a basket of six major currencies was almost flat at 97.530 after gaining 0.2% the previous day.

As regards raw materials, crude oil futures in the United States fell by 0.55% to $ 61.44 a barrel after the American Petroleum Institute (API) recorded an increase in larger crude oil inventories expected. (OR)

Crude oil inventories in the United States increased by 8.6 million barrels during the week until 10 May to 477.8 million, compared to analysts' expectations of a decrease of 800,000 barrels.

Brent crude fell 0.18% to $ 71.11 a barrel.

The Brent crude and the future of the United States rose the previous day after Saudi Arabia said that the explosives-laden drones launched by a Yemeni armed movement aligned with Iran attacked the company's structures state oil company Aramco.

GRAPHIC: Asian stock markets – tmsnrt.rs/2zpUAr4

Editing by Shri Navaratnam and Sam Holmes

Our standards:The principles of the Thomson Reuters Trust.

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