Asian shares near seven-month highs, investors pause for breath

PTI
Shanghai, China Published: Apr 03, 2019, 09:06 AM(IST)

Employees of the Tokyo Stock Exchange (TSE) work at the bourse in Tokyo. Photograph:( Reuters )

Story highlights

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.65 per cent shortly after the markets in China opened, touching its highest level since late August.

Asian shares rose to fresh seven-month highs on Wednesday as global investors took heart from signs of progress in US-China trade talks and brisk economic data, while oil approached the key $70 per barrel mark.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.65 per cent shortly after the markets in China opened, touching its highest level since late August.

The index has risen nearly 3 per cent since Thursday following reports of trade talk progress between the United States and China, as well as reassuring factory activity data from China and the US.

Hopes for a deal to end the trade war between the world's two largest economies were fanned by White House economic adviser Larry Kudlow's comments on Wednesday that Washington expects "to make more headway" in trade talks this week.

The global run of gains has also pushed MSCI's key gauge of global equities to a six-month high. The global index was up 0.2 per cent on Wednesday morning.

Australian shares were up 0.68 per cent, and Japan's Nikkei stock index added 0.76 per cent. Chinese blue-chips were up about 0.2 per cent.

On Tuesday, the Dow Jones Industrial Average fell 0.3 per cent to 26,179.13 points, the S&P 500 was flat and the Nasdaq Composite added 0.25 per cent to 7,848.69.

"After such a strong rise it is no surprise that the risk rally stalled a little," said Greg McKenna, strategist at McKenna Macro.

But after a brief consolidation in risk sentiment, US Treasury yields once again ticked higher.

Benchmark 10-year Treasury notes yielded 2.4991 per cent, up from a US close of 2.479 per cent on Tuesday, and the two-year yield touched 2.3226 per cent compared with a US close of 2.308 per cent.

Oil prices also stood near multi-month highs amid concerns about supply, with Brent crude rising as much as 0.72 per cent to $69.87 per barrel, its highest since November and near the psychologically important level of $70 per barrel.

US West Texas Intermediate (WTI) crude jumped 0.37 per cent to $62.81 a barrel.

News that the United States is considering more sanctions against Iran, the fourth-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) and the halting of production at a crude terminal in Venezuela threaten to squeeze supply and pushed oil prices up on Tuesday.

In currency markets, the pound was about 0.1 per cent higher at $1.3138, having recovered its footing after British Prime Minister Theresa May said she would seek another delay to Brexit to work out an EU divorce deal with opposition Labour leader Jeremy Corbyn.

The dollar strengthened against the yen to 111.47 and the euro added 0.18 per cent to buy $1.1222.

The dollar index, which tracks the greenback against a basket of six major rivals, eased 0.18 per cent to 97.183.

Gold was slightly lower, with spot gold trading at $1,292.46 per ounce.

Read in App