Asian stock markets tick up on US tax plan hopes
TOKYO: Most Asian markets edged higher Wednesday after a global equities rally driven by optimism over a US tax reform plan, but President Donald Trump’s comments about terminating the North American Free Trade Agreement capped gains.
Markets have chalked up a comeback after struggling in recent weeks due to the continuing standoff between the US and North Korea, which has been compounded by Thursday’s terror attack in Barcelona.
The US president’s woes have fuelled speculation he will struggle to push through his market-friendly economy-boosting policies that fanned a global market rally in the months after his November election.
Despite ongoing chaos at the White House, markets have been heartened by reports suggesting that the Trump administration was making headway on a tax reform plan.
“Some of the US political uncertainty may have been removed by a report on the Trump administration making progress on tax reform, but a wait-and-see mood is strong ahead of Jackson Hole and tensions in North Korea still in place,” Tsutomu Nakamura, strategist at Ueda Harlow Corp. in Tokyo, said in a commentary, referring to a central bankers meeting on Friday.
The Japanese yen rose as investors pushed into safer investments after Trump said in a US speech that he may end NAFTA, and vowed to pressure Congress to fund a border wall with Mexico that was at the centre of his election campaign.
“The NAFTA hot air may be as much an excuse to take a step back after Wall Street’s surge yesterday, as it is a legitimate concern about the president not appreciating nuances of inter-dependence embedded in trade deals,” Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore, told Bloomberg News.
The stronger yen pared some gains in Tokyo where the benchmark Nikkei 225 index ended 0.3 percent higher, while Seoul and Taipei edged up 0.1 percent and Singapore was flat.
But Shanghai ended 0.1 percent lower and Sydney slipped 0.2 percent.
Hong Kong’s stock market was closed as powerful Typhoon Hato brought the southern Chinese city to a standstill.
Europe’s main stock markets eased at the start of trading Wednesday, with London’s benchmark FTSE 100 index down 0.2 percent, while the Paris CAC 40 index dipped 0.1 percent and Frankfurt’s DAX 30 was flat.
All eyes are on the Jackson Hole symposium in Wyoming at the end of the week, which brings together the world’s top central bank chiefs.
Much of the attention will be on Federal Reserve boss Janet Yellen, with hopes for some clues about the bank’s plans to wind in its huge bond holdings.
European Central Bank chief Mario Draghi’s speech will also be closely watched as Frankfurt-based policymakers consider cutting back their own balance sheet.
Tokyo – Nikkei 225: UP 0.3 percent at 19,434.64 (close)
Hong Kong – Hang Seng: closed
Shanghai – Composite: DOWN 0.1 percent at 3,287.71
London – FTSE 100: DOWN 0.2 percent at 7,368.43
Euro/dollar: UP at $1.1786 from $1.1764
Pound/dollar: DOWN at $1.2799 from $1.2821
Dollar/yen: DOWN at 109.44 yen from 109.56 yen
Oil – West Texas Intermediate: UP 11 cents at $47.70 per barrel
Oil – Brent North Sea: DOWN 21 cents at $51.71 per
Published in Daily Times, August 24th 2017.