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Asian Markets Mostly Higher After U.S., China Sign Trade Deal

asianmarkets2 dec19 15jan20 lt

Asian stock markets are mostly higher on Thursday as investors digested details of the phase one trade deal that was signed by between the U.S. and China overnight. The deal calls for China to purchase $200 billion worth of U.S. goods over the next two years, including up to $50 billion worth of agricultural products.

However, investors also weighed the likely impact of Trump administration's decision to leave the 25 percent tariff on $250 billion worth of Chinese imports in place till the second phase of the trade deal.

The Australian market is rising for a third straight day, with the benchmark index surging past the 7,000 level for the first time, after the U.S. and China signed the phase one trade deal.

The benchmark S&P/ASX 200 Index is adding 35.20 points or 0.50 percent to 7030.00, off a record high of 7,041.60 earlier. The broader All Ordinaries Index is up 33.70 points or 0.47 percent to 7,147.20. Australian stocks hit fresh record highs on Wednesday.

In the tech sector, Wisetech Global is gaining almost 4 percent, Appen is higher by more than 2 percent and Xero is rising more than 1 percent.

Gold miners are also higher after gold prices rose overnight. Evolution Mining and Newcrest Mining are advancing more than 1 percent each.

The big four banks - Westpac, Commonwealth Bank, ANZ Banking and National Australia Bank - are advancing in a range of 0.6 percent to 0.8 percent.

Meanwhile, the major miners are weak. BHP is declining 0.4 percent, Fortescue Metals is lower by 0.3 percent and Rio Tinto is down 0.2 percent.

Oil stocks are also mostly lower after crude oil prices declined to a six-week low overnight. Santos is losing more than 1 percent and Oil Search is lower by 0.2 percent, while Woodside Petroleum is advancing almost 1 percent.

Caltex Australia said it has reached an agreement with Alimentation Couche-Tard to provide confidential information that will allow the Canadian convenience store chain to formulate a revised takeover proposal appropriately reflecting the value of Caltex. The fuel retailer's shares are edging up 0.1 percent.

On the economic front, Australia will see November numbers for home loans today.

In the currency market, the Australian dollar is higher against the U.S. dollar on Thursday. The local currency was quoted at $0.6904, up from $0.6896 on Wednesday.

The Japanese market pared initial gains and is modestly higher following the signing of the long-awaited trade deal between the U.S. and China. Upbeat Japanese core machinery orders data failed to boost sentiment.

The benchmark Nikkei 225 Index is adding 8.29 points or 0.03 percent to 23,924.87, after touching a high of 23,975.38 in early trades. Japanese stocks closed lower on Wednesday.

Market heavyweight SoftBank Group Corp. is declining 0.6 percent, while Fast Retailing is advancing more than 1 percent.

Among tech stocks, Advantest is lower by 0.6 percent and Tokyo Electron is down 0.5 percent.

The major exporters are mixed on a stronger yen. Sony and Panasonic are rising more than 1 percent each, while Mitsubishi Electric is declining 0.2 percent and Canon is edging down 0.1 percent.

Among auto stocks, Honda Motor is losing 0.7 percent and Toyota Motor is edging up 0.1 percent.

In the oil sector, Inpex is lower by 0.4 percent while Japan Petroleum is rising 0.3 percent after crude oil prices declined to a six-week low overnight.

Among the other major gainers, Daiichi Sankyo is rising more than 3 percent, while Daikin Industries, Suzuki Motor and Casio Computer are higher by more than 2 percent each.

On the flip side, IHI Corp. and Hitachi Construction Machinery are losing more than 3 percent each, while Yaskawa Electric is lower by almost 3 percent.

In economic news, the Cabinet Office said that core machine orders in Japan jumped a seasonally adjusted 18.0 percent on month, coming in at 942.7 billion yen. That blew past expectations for an increase of 2.9 percent following the 6.0 percent slide in October.

The Bank of Japan said producer prices in Japan were down 0.1 percent on month in December, in line with expectations and slowing from 0.2 percent in November.

In the currency market, the U.S. dollar is trading in upper 109 yen-range on Thursday.

Elsewhere in Asia, South Korea, Singapore, New Zealand and Hong Kong are also higher, while Shanghai, Indonesia, Malaysia and Taiwan are lower.

On Wall Street, stocks saw early strength on Wednesday as traders awaited the signing of the phase one trade deal between the U.S. and China. However, stocks pulled back after President Donald Trump and Chinese Vice Premier Liu He, Beijing's chief trade negotiator, officially signed the agreement in a ceremony at the White House.

The Dow climbed 90.55 points or 0.3 percent to 29,030.22 and the S&P 500 rose 6.14 points or 0.2 percent to 3,289.29, but the Nasdaq pulled back near the unchanged line before closing down 0.41 points or less than a tenth of a percent at 9,250.92.

The major European markets turned in a mixed performance on Wednesday. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index edged down by 0.1 percent and 0.2 percent, respectively.

Crude oil prices settled at a six-week low on Wednesday after data showed a notable increase in gasoline and distillate stockpiles in the week ended January 10. WTI crude for February delivery fell $0.42 or about 0.7 percent to $57.81 a barrel.

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