Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid
September 23, 2019
By Swati Pandey
SYDNEY (Reuters) – Asian shares started higher on Monday on hopes of an interim Sino-U.S. tariff deal after the two countries described their talks as “productive” and “constructive”, while oil gained more than 1% as Middle East tensions remained elevated.
Australian shares <.AXJO> added 0.4% while New Zealand’s benchmark index <.NZ50> was 0.2% higher. South Korea’s Kospi <.KS11> was a touch weaker after disappointing trade data, while Japan’s Nikkei <.N225> was closed for a holiday.
That left MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> up 0.5% at 511.28 points. It is up 3.4% so far in September.
The E-mini futures for U.S. S&P 500 <ESc1> climbed 0.5% while Dow minis <1YMc1> were up 0.46%.
The gains come after the U.S. Trade Representative’s office issued a brief statement characterizing the two days of talks with China as “productive.” It added that a principal-level trade meeting in Washington would take place in October, as previously planned.
China’s Commerce Ministry, in a brief statement, described the talks as “constructive”, and said they had also had a good discussion on “detailed arrangements” for the high-level talks in October.
Additionally, the United States removed tariffs from more than 400 Chinese products in response to requests from U.S. companies.
“The two nations have continued to hold constructive talks. That’s helped the sentiment but the markets still remain unconvinced,” said Rodrigo Catril, senior forex strategist at National Australia Bank in Sydney.
Investors were still a bit jittery as news broke on Friday that Chinese officials unexpectedly canceled a visit to U.S. farms next week following their two days of negotiations in Washington.
That led to losses in Wall Street on Friday with the Dow closing 0.6% lower, the S&P500 <.SPX> 0.5% down and Nasdaq <.IXIC> off 0.8%.
“Trade tensions are likely to wax and wane ahead of U.S.-China October negotiations,” Citi analyst Cesar Rojas said in a note.
“Despite recent signs of a moderation in the pace of trade tensions escalation ahead of the October face-to-face negotiations, we continue expect U.S.-China trade tensions to continue.”
Later in the day, September manufacturing activity surveys are due from the United States and European Union which will be closely watched for any signs of a rebound.
Action in currency markets was muted.
The dollar gained 0.1% against the safe haven Japanese yen to 107.74 <JPY=> after easing 0.5% last week. The risk-sensitive Australian dollar <AUD=D3> was up 0.15% at $0.6773.
The euro <EUR=D3> was mostly flat as was the British pound <GBP=>. That left the dollar index <.DXY> unchanged at 98.494.
In commodities, Brent crude <LCOc1> futures jumped 1.12%, or 72 cents, to $65 a barrel, while U.S. crude <CLc1> futures escalated 1.19%, or 69 cents, to $58.78 a barrel. [O/R]
The Pentagon has ordered additional troops to be deployed in the Gulf region to strengthen Saudi Arabia’s air and missile defenses following an attack on Saudi oil facilities.
U.S. Secretary of State Mike Pompeo said on Sunday the additional troops are for “deterrence and defense” and Washington aimed to avoid war with Iran.
With markets calmer since the Sept. 14 attacks on Saudi Arabian refineries, gold pulled back slightly. [GOL/]
Spot gold <XAU=> was off 0.25% at $1,512.8 an ounce.
(Editing by Jacqueline Wong and Lincoln Feast)
