Treasury Secretary Steven Mnuchin said he is hopeful for success in the trade talks with China (Zach Gibson)
Hong Kong (AFP) – Asian markets were mixed Monday, with an early rally in some cities pared, though investors remain upbeat thanks to a healthy start to the US earnings season and hopes for China-US trade talks.
Traders raced out of the blocks as they put last week’s stutter behind them, boosted by data last week showing a sharp jump in credit growth in China as easing measures kick in, while exports beat expectations and inflation perked up.
New York’s three main indexes provided a positive lead after Wall Street titan JP Morgan recorded a pick-up in profits, suggesting the economy remains in rude health and fuelling optimism for upcoming corporate reports.
“The environment of easier financial conditions is beginning to have an impact on the broader economy,” Binay Chandgothia at Principal Global Investors told Bloomberg TV.
“If that is the case and growth does pick up, you’ll see an uptick in analyst expectations and earnings as well, which should help continue the rally.”
Tokyo added 1.4 percent, Singapore and Sydney were flat, while Wellington added 0.8 percent. Seoul, Mumbai, Taipei and Jakarta were also higher.
However, profit-takers stepped in as the day wore on, leading Hong Kong and Shanghai to end with losses, while Singapore and Manila also suffered a sell-off. Investors are now looking ahead to the release of Chinese growth figures Wednesday.
– Mnuchin ‘hopeful’ –
In early trade London dropped 0.1 percent, but Paris and Frankfurt each rose 0.1 percent.
Investors were back in a buying mood after last week’s gyrations that came on the back of concerns about a possible new trade war between the US and the European Union as Donald Trump threatened to hit the bloc with tariffs over subsidies to aviation giant Airbus.
Buying was also being supported by comments from Treasury Secretary Steven Mnuchin, who said at the weekend that he was “hopeful we’re getting close to the final round of concluding issues” on the China trade talks.
The remarks were picked up as another positive sign that the trade war between the world’s top two economies, which helped hammer global markets last year, could be nearing an end.
The International Monetary Fund said the world economy should start to bounce back towards the end of the year, as long as China and the US resolve their differences.
US officials are also kicking off two days of trade talks with Japan later in the day in Washington, with both sides previously saying they wanted to reach an agreement quickly.
– Key figures around 0810 GMT –
Tokyo – Nikkei 225: UP 1.4 percent at 22,169.11 (close)
Hong Kong – Hang Seng: DOWN 0.3 percent at 29,810.72 (close)
Shanghai – Composite: DOWN 0.3 percent at 3,177.79 (close)
London – FTSE 100: DOWN 0.1 percent at 7,430.64
Pound/dollar: UP at $1.3097 from $1.3071 at 2040 GMT on Friday
Euro/pound: DOWN at 86.42 pence from 86.43 pence
Euro/dollar: UP at $1.1319 from $1.1298
Dollar/yen: DOWN at 111.93 yen from 111.99 yen
Oil – West Texas Intermediate: DOWN 34 cents at $63.55 per barrel
Oil – Brent Crude: DOWN 16 cents at $71.38 per barrel
New York – Dow: UP 1.0 percent at 26,412.30 (close)
Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.