Markets await fresh Sino-US talks; Asia rises on optimism
tokyo — Asian shares held near 6-1/2-month highs on Friday after upbeat US data and optimism in the tech sector helped calm some of the jitters sparked by the Federal Reserve’s cautious outlook on the world’s biggest economy.
Markets showed some signs of fatigue during the afternoon session as focus turned to a fresh round of Sino-US trade talks.
MSCI’s broadest index of AsiaPacific shares outside Japan was nearly flat, trimming earlier gains, but still not far off 6-1/2-month highs reached earlier in the day.
The info tech sector rose 0.8 per cent, while Japan’s Nikkei average added 0.1 per cent.
Asian indexes reversed early losses on optimism surrounding the talks. The Shanghai Composite index, which gave up 1 per cent in early trading, finished 0.1 per cent higher at 3,104.15. The Kospi in South Korea rose 0.1 per cent to 2,186.95 and Australia’s S&P ASX 200 gained 0.5 per cent to 6,195.20.
Japan’s Nikkei 225 index, reopening after a market holiday, edged 0.1 per cent higher to 21,627.34, even after a report said inflation slowed slightly in February. The country’s core consumer price index rose 0.7 per cent from a year earlier, compared with January’s 0.8 per cent gain.
Hong Kong’s Hang Seng added 0.1 per cent at 29,113.36. Shares rose in Taiwan and in most of Southeast Asia.
Many markets took on a more cautious tone after the early session gains, likely as they awaited another round of Sino-US talks. China’s Shanghai Composite, the blue-chip CSI 300 and Hong Kong’s Hang Seng dropped between 0.1 and 0.4 per cent each.
In Europe, Britain’s FTSE 100 led the decline, trading down 1.3 per cent at 7,260, while the CAC 40 in France slid 1.2 per cent to 5,315. Germany’s DAX lost 0.7 per cent to 11,467.
Stocks were sliding on Wall Street on Friday and bond yields are moving sharply lower as investors worry that global economic growth is slowing.
The S&P 500 index fell 1.6 per cent as of noon. At this rate the market would be headed for its worst daily loss since January 3.
The Dow fell 342 points, or 1.3 per cent, to 25,621 and the Nasdaq composite fell 1.8 per cent.
Banks and technology companies led the declines, which wiped out the market’s gains for the week. Citigroup led a slump in banks with a 4.9 percent loss as bond yields continue to drop, threatening the profitability of financial companies that make money from lending.
Big technology companies, which would stand to lose more
than other sectors in a slowing economy, fell more than the rest of the market.
Hewlett-Packard fell 3 per cent and Intel lost 2 per cent.
Boeing gave up 2.3 per cent after Indonesia’s flag carrier became the first airline to seek to cancel an order of 737 Max 8 jets, which have been involved in two fatal crashes in the past six months.
Nike, another component of the Dow Jones Industrial Average, dropped 5.3 per cent after reporting weak sales in North America. And Greenbrier, which makes railroad equipment, plunged 9.7 per cent after releasing a dismal forecast.
Gold rises
Gold edged higher on Friday as weak economic data from the euro zone exacerbated fears of a global slowdown, weighing on risk sentiment and putting bullion on track for its best week in nearly two months.
Spot gold climbed about 0.3 per cent at $1,313.01 per ounce by 1602GMT), while US gold futures gained 0.4 per cent to $1,312.50.
The dollar slipped to ¥110.27 from ¥110.81 late on Thursday. The euro weakened to $1.1299 from $1.1374. —