Asian shares rise on China turnaround, trade fears persist
SHANGHAI: Asian shares rose yesterday, with markets reversing earlier losses, but investors were apprehensive as the Sino-US trade dispute threatened to escalate this week and Argentina’s austerity measures rattled emerging markets.
MSCI’s broadest index of AsiaPacific shares outside Japan was up 0.2 per cent.
Chinese blue- chips gained 0.9 per cent after five straight days of losses, supported by real estate and banking stocks.
Japan’s Nikkei fell less than 0.1 per cent, while Australian shares ended 0.3 per cent lower.
Shares in Europe are expected to open lower on Tuesday following a mostly flat close on Monday. Spreadbetters see the FTSE 100 opening 0.09 per cent lower at 7,498, the DAX opening 0.13 per cent lower at 12,330, and the CAC 40 losing 0.09 per cent to 5,409.
US stock market futures were higher on Tuesday, with S& P500 E-mini futures gaining 0.3 per cent to 2909.25.
“The majors are the focus today rather than emerging markets,” said Greg McKenna, chief market strategist at Axi Trader in Sydney, noting that weak manufacturing data and the imposition of austerity measures in Argentina had drawn the market’s attention on Monday.
“Today it’s back to where is the US dollar going, and at the moment the vote in Asia has been it’s going to strengthen again,” he said.
“It’s utterly consistent that the US dollar is strengthening at the same time that US futures are rallying if what we’ve seen over the last two months, which is money being allocated to the US and away from other regions, continues.”
The dollar index, which tracks the greenback against a basket of six major rivals, was 0.14 per cent higher at 95.272.
The dollar was up 0.07 per cent against the yen to 111.15 , while the euro was down 0.15 per cent on the day at US$ 1.1606.
Manufacturing surveys published on Monday showed mounting stress on factories across Europe and Asia as the outlook for global trade dims.
On Monday, Argentine President Mauricio Macri announced new taxes on exports and steep cuts to government spending in what he termed “emergency” measures to balance next year’s budget.
The Argentine peso closed 3.14 per cent weaker on Monday and is expected to face further pressure in coming days.
Turkey’s central bank signalled on Monday it would take steps to combat “significant risks” to price stability, comments seen as hinting at interest rate hikes.
The lira, which has lost 40 per cent of its value against the US dollar this year, was 0.3 per cent stronger at 6.6000 to the dollar. — Reuters