Asian markets mostly up at end of a painful quarter

Global markets have suffered a torrid quarter, which has been characterised by fears of a trade war between China and the United States

Hong Kong (AFP) – Asian markets mostly rose Friday, bringing an end to a tumultuous quarter that has seen sharp losses around the world, with China-US trade tensions showing no sign of calming.

Trading floors have witnessed heavy selling in April-June as the two biggest economies exchanged threats of tariffs — and in some cases imposed them — on billions of dollars of imports, fuelling fears for global growth.

An increasing source of concern for many investors is China, where the main stock market is in bear territory after losing more than 20 percent from a recent peak and the yuan continues to struggle.

Many analysts warn any trade war with the US would likely hurt Beijing more, with growth in the Asian giant already showing signs of slowing this quarter and authorities looking to provide support.

That comes just as the US perks up with the Federal Reserve expected to press ahead with interest rate hikes this year and next, and expansion likely to impress further.

The ongoing US strength “implies that the Fed will keep hiking rates because it will need to”, said Greg McKenna, chief market strategist at AxiTrader.

“It implies that bonds will continue to have an upward bias, it implies that earnings for US companies should do OK, and it implies that the US will stand out as an investment destination as the de-synchronisation of global growth sees other blocs and nations lag behind.”

With investors uncertain about the next moves by Donald Trump, markets fluctuated in early trade despite a positive lead from Wall Street, but most were in positive territory in later trade.

Tokyo ended 0.2 percent higher, with electronics giant Sharp soaring more than 15 percent after saying it would cancel a plan to raise some $1.8 billion through a public offering, citing the China-US trade frictions.

– Oil gains seen –

Hong Kong Kong jumped more than one percent in the afternoon while Shanghai closed up more than two percent — both markets having been at the forefront of much of the selling in recent weeks.

Dealers also welcomed the release by China of a narrower “negative list” of sectors foreign firms were restricted from investing in as Beijing looks to open up its economy as it prepares for a possible trade war.

Singapore added 0.6 percent and Singapore 0.5 percent while Taipei and Manila and Jakarta all posted strong gains.

However, Sydney and Bangkok went into reverse.

On currency markets the dollar dipped against the yuan but the Chinese unit is about two percent down over the week, which has led some observers to suggest China is looking to weaken the unit in preparation for the impact of a possible trade war.

The euro rallied after European Union leaders agreed on a migration deal, which soothed concerns about fresh unrest in the troubled bloc.

And India’s rupee edged up slightly a day after hitting a record low on the back of an increase in oil prices.

Energy firms in the region struggled to maintain their strong upward momentum from earlier in the week, despite another rise in oil prices Thursday and lingering optimism about demand after data showed a huge drop in US stockpiles.

Both main oil contracts were down Friday but WTI has soared more than 10 percent and Brent around six percent this week. Dealers have been cheered by a modest lift in an output cap by OPEC and Russia while analysts said the momentum is likely to continue as Washington moves to tighten sanctions against Iran.

“The Trump administration looks poised to carry on with a maximum pressure campaign on Tehran,” said Benjamin Lu, an analyst with Phillip Futures in Singapore.

In early trade London rose 0.9 percent, Paris surged 1.2 percent and Frankfurt rallied 1.3 percent.

– Key figures around 0720 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 22,304.51 (close)

Hong Kong – Hang Seng: UP 1.5 percent at 28,917.23

Shanghai – Composite: UP 2.2 percent at 2,847.42 (close)

London – FTSE 100: UP 0.9 percent at 7,680.36

Euro/dollar: UP at $1.1641 from $1.1564 at 2030 GMT

Pound/dollar: UP at $1.3115 from $1.3076

Dollar/yen: UP at 110.63 yen from 110.53 yen

Oil – West Texas Intermediate: DOWN 25 cents at $73.20 per barrel 

Oil – Brent Crude: DOWN 11 cents at $77.74 per barrel

New York – Dow Jones: UP 0.4 percent at 24,216.05 (close)