TOKYO, March 15 — Asian stocks stepped ahead today as sentiment improved on a report that more progress has been made in US-China trade talks and after UK lawmakers voted to delay a potentially chaotic exit from the European Union.
Chinese Vice Premier Liu He spoke by telephone with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer, with the two sides making further substantive progress on trade talks, Xinhua news agency said today.
Yet, the prospect of the trade talks taking longer than expected tempered the cheer, and there was still no clarity on how close the two economic powers are on reaching an agreement.
Mnuchin said yesterday that a summit to seal a trade deal between US President Donald Trump and his Chinese counterpart Xi Jinping will not happen at the end of March as previously discussed because more work is needed in negotiations.
MSCI broadest index of Asia-Pacific shares outside Japan gained 0.5 per cent.
The Shanghai Composite Index added 1.3 per cent.
Japan’s Nikkei climbed 1 per cent and South Korea’s KOSPI rose 0.9 per cent.
Global markets drew some relief overnight with European stocks rising to a five-month high, boosted by strength in the banking sector after Britain’s parliament voted to reject a disorderly Brexit.
But the S&P 500 dipped 0.1 per cent, snapping a three-day winning run, and the Nasdaq shed 0.2 per cent yesterday in the wake of uncertainty over when a US-China trade deal would be reached.
“Initial expectations were for the trade talks to wrap up in March. So any delay causes the markets to automatically assume that the negotiations are not going well, and this is a negative factor for equities,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
In the currency market, the pound was steady at US$1.3237 , trimming some of the heavy losses suffered overnight.
Sterling retreated 0.75 per cent yesterday as investors geared up for British Prime Minister Theresa May to once more try and win approval for her Brexit deal.
Her third chance to get the divorce deal approved came after British lawmakers voted yesterday to seek a delay in Britain’s exit from the European Union.
The dollar held gains having snapped its four-day losing streak to a group of six major peers.
The dollar index was little changed at 96.738 after rising 0.25 per cent yesterday to bounce back from a nine-day trough of 96.385.
The greenback rose as US Treasury yields climbed from two-month lows marked earlier in the week, driven by corporate supply.
The dollar extended the previous day’s gains and was 0.1 per cent higher at 111.84 yen.
The yen showed little response to the Bank of Japan’s widely expected decision to keep interest rates unchanged. Not surprisingly, the central bank offered a bleaker assessment of exports and output, as global demand waned.
The euro edged up 0.1 per cent to US$1.1311 after slipping 0.2 per cent overnight.
US crude oil futures declined 0.1 per cent to US$58.55 per barrel, losing some steam after a recent surge but holding close to a four-month peak of US$58.74 brushed yesterday.
Oil prices soared to the four-month high as investors focused on global production cuts and supply disruptions in Venezuela. — Reuters
