Gulf Times - Gulf Times Business
Asian bourses rise on Wall Street rally
Asian markets largely rose yesterday, tracking a Wall Street rally after the head of the Federal Reserve expressed confidence in the US economy despite fears of a global trade war.
Federal Reserve chief Jerome Powell offered a positive outlook citing a strong job market and inflation figures in line with Fed targets, sending US stocks higher.
“Powell’s testimony was music to investor’s ears as the Dow gained for the fourth consecutive day while the Nasdaq hit a new high-water mark”, said Stephen Innes, head of Asia-Pacific trading at OANDA.
But Powell acknowledged uncertainty over the “outcome of current discussions over trade policy”, with US President Donald Trump hitting out at China and other economic partners as he adopts an aggressive “America First” policy.
Fears about an all-out China-US trade war continue to rattle investors, with both sides lodging counter-complaints at the World Trade Organisation after recently imposing and threatening further tariffs on billions of dollars worth of goods.
Washington’s traditional allies Japan and the EU have also not been spared from hefty US tariffs.
In a move described by officials as a “clear message” against protec- tionism, the EU and Japan signed a sweeping free trade deal on Tuesday, eliminating tariffs for a wide range of products from Japanese cars to French cheese.
Japanese exporters advanced yesterday trading with Toyota rising 1.35% to ¥7,473, Panasonic gaining 0.62% to ¥1,452 and Olympus ending up 0.90% at ¥4,450.
Tokyo rose 0.4% on the back of a cheaper yen as the dollar strengthened following Powell’s upbeat view of the US economy. Singapore also gained 0.3% while Sydney climbed 0.7%. But Shanghai lost 0.4% while Hong Kong edged down 0.3%.
And Seoul fell 0.3% as South Korea’s finance minister warned that an all-out trade war between the US and China would have grim implications for the export-reliant country.
Oil extended its losses after an industry group reported a surprise increase in US inventory.
Both main contracts fell following a report late Tuesday by the American Petroleum Institute that US crude stockpiles had increased by more than 600,000 barrels last week.
After withdrawing from the Iran nuclear deal in May, the US said it would reinstate sanctions on the oilproducing nation, and warned other countries to stop purchasing Iranian exports including crude.
In Tokyo, the Nikkei 225 closed up 0.4% to 22,794.19 points; Hong Kong — Hang Seng ended down 0.3% to 28,110.07 points and Shanghai — Composite closed down 0.4% to 2,787.26 points yesterday.