TOKYO, Dec 2 — Global shares ticked up today and oil rebounded after a big fall late last week, as investors clung to hopes Beijing and Washington could reach a compromise in trade talks although increasing tensions over Hong Kong unsettled market confidence.
MSCI’s index of Asia-Pacific shares outside Japan was up 0.17 per cent, reclaiming some of its one-per cent-plus loss on Friday while Japan’s Nikkei rose 0.85 per cent.
US stock futures gained 0.29 per cent to edge near their record highs after a dip in a truncated US session on Friday due to Thanksgiving holiday.
MSCI’s broadest gauge of world shares, all-country world index, ticked up 0.07 per cent and stood within reach of its all-time peak hit in January 2018.
While US legislation supporting Hong Kong protesters last week hit optimism of a US-China trade deal, investors are nonetheless holding the broad view that a further escalation in the trade war can be avoided.
“It looks a bit difficult for two countries’ leaders to shake hands and sign a deal this month. What is more likely is to essentially kick the can, with China buying more US farm products while the US postpones its next tariffs,” said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management.
“Markets will consider such an arrangement as a de facto deal whether they officially sign it or not,” he said.
Investors have long thought that the United States will avoid imposing an additional 15 per cent tariff on about US$156 billion (RM651.8 billion) of Chinese products on December 15 after signing a deal with China.
The two countries have been so far unable to bridge the gap over existing tariffs on Chinese goods, with Beijing demanding scrapping them as a part of any trade deal.
A trade deal between United States and China was now “stalled because of Hong Kong legislation”, news website Axios reported yesterday, citing a source close to US President Donald Trump’s negotiating team.
China’s Foreign Ministry last week lambasted US legislation signed by President Donald Trump on Wednesday backing protesters in Hong Kong as a serious interference in Chinese affairs.
In the currency market the yen weakened, helped also by expectations that Japan could put together a large-scale fiscal spending package to bolster its economy.
Against the yen, the dollar rose 0.25 per cent to ¥109.675, a six-month high.
The euro stood little changed at US$1.10215, bouncing back from seven-week low of US$1.0981 hit in US trade.
The British pound slipped 0.25 per cent to US$1.2909 after opinion polls during the weekend showed Prime Minister Boris Johnson’s Conservative Party saw its lead over the opposition Labour Party narrow.
Oil prices bounced back a tad after a big slump on Friday on concerns about fresh trade tensions and record high US crude production.
The market drew some support from expectations that Opec and its allies are likely to extend existing oil output cuts when they meet this week , with non-Opec oil producer Russia supporting Saudi Arabia’s push for stable oil prices amid the listing of state oil giant Saudi Aramco.
Brent crude futures rose 1.16 per cent to US$61.19 a barrel while US West Texas Intermediate (WTI) crude gained 1.41 per cent to US$55.95 per barrel. — Reuters
