Asian shares extend recovery on Wall Street gains

A man looks at an electronic stock quotation board outside a brokerage in Tokyo February 9, 2018. — Reuters pic
A man looks at an electronic stock quotation board outside a brokerage in Tokyo February 9, 2018. — Reuters pic

SHANGHAI, July 13 — Asian shares were higher today following gains on Wall Street overnight, as concerns over an escalating US trade war with China took a breather.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent, building on a 0.6 per cent rise yesterday, after US stocks ended the day higher.

Australian shares also gained 0.2 per cent, while Japan's Nikkei stock index was 1.2 per cent higher.

Shares in Asia had recovered yesterday after dropping on an announcement from Washington that the US planned to institute 10 per cent tariffs on an additional US$200 billion (RM805.8 billion) in Chinese imports.

The US slapped import tariffs of 25 per cent on US$34 billion worth of Chinese goods on July 6, prompting a matching response from China.

But while China has vowed to retaliate to the new tariffs, the lack of a specific response to date has sparked a global relief rally.

Yesterday, the Dow Jones Industrial Average rose 0.91 per cent to 24,924.89, the S&P 500 gained 0.87 per cent to 2,798.29 and the Nasdaq Composite added 1.39 per cent to 7,823.92.

Today, S&P500 e-mini futures rose to a five-month high on expectations of solid earnings growth among US firms despite the trade war threat.

“Some have suggested that Chinese officials are easing back their rhetoric with the intention of going back to the negotiation table, perhaps in light of increased concerns about economic impacts,” ANZ analysts wrote in a note on Friday. “But it is not clear whether it is truly a change in tone or if the US news was a surprise to China's economic team and a reaction is being prepared.”

Yesterday, US Treasury Secretary Steven Mnuchin said that the US and China could reopen trade talks, but only if Beijing was willing “to make serious efforts to make structural changes.”

The US dollar, which has been a safe haven amid global uncertainty over trade, touched 112.70 against the yen, its highest level since Jan 10. At 0003 GMT, it was changing hands at 112.67, up 0.1 per cent.

The US dollar index, which tracks the greenback against a basket of six major rivals, was up 0.1 per cent at 94.868. The euro was down less than 0.1 per cent at US$1.1665.

In commodities, US crude was flat at US$70.32 a barrel. Brent crude gave up some ground, falling 0.2 per cent to US$74.34 per barrel. Brent prices had risen yesterday after a warning from the International Energy Agency about the world's stretched oil supply cushion drove concerns about spare capacity.

The warning came after supply disruptions in recent weeks from countries including Venezuela, Norway, Canada and Libya.

Spot gold was flat, trading at US$1,246.58 per ounce. — Reuters

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