HONG KONG: Hong Kong led a rally in most Asian markets on Thursday after the US reached out to China in a fresh bid to avert a trade war, providing some much-needed respite to weary investors.
News that Treasury Secretary Steven Mnuchin had invited top Chinese officials for talks comes just under a week after Donald Trump threatened to impose tariffs on all $500 billion worth of imports from China.
The president’s top economic adviser Larry Kudlow called the move a “positive thing” and added that “you could say that communication has picked up a notch”.
China’s commerce ministry on Thursday welcomed the offer and said the two sides were discussing details.
Hong Kong’s Hang Seng Index jumped 2.5 percent, having fallen for six straight days and into a bear market, which is a 20 percent drop from its January record high.
Shanghai climbed 1.2 percent, Seoul gained 0.1 percent and Tokyo ended one percent higher.
Wellington, Taipei, and Manila were also higher, while Jakarta ran up 0.9 percent and Bangkok 1.6 percent. But Sydney fell 0.8 percent and Singapore eased 0.2 percent.
“Markets should welcome the news of possible resumption of high-level trade talks between China and the US,” said Tai Hui, JP Morgan Asset Management chief market strategist for Asia-Pacific.
“This may reflect strong feedback from the US corporate sector against further expansion of the list of Chinese exports that would be subjected to higher tariffs.”
However, while he said the latest round of threatened tariffs could be delayed, he said Beijing had already agreed to buy more American goods to reduce its gaping surplus with the US and open up the economy further, so it might not be able to offer much more.
“The road to a more sustained resolution is still challenging,” Tai added.
And Stephen Innes, head of Asia-Pacific trading at OANDA, said “the playbook remains unchanged and it would be a total surprise for many market participants if the Trump administration didn’t follow through” with the next round of tariffs.
The tariffs are clearly starting to hit US and European firms based in China.
On Thursday, the American Chamber of Commerce in China said a survey found most US companies are seeing rising costs, lower profits and tighter scrutiny, and a separate poll of 200 EU companies in the country showed 17 percent are delaying investment or expansion plans.
That comes a day after the Federal Reserve reported increasing fears across the United States about the trade row, with some businesses planning to curtail capital spending, while a new lobby group announced plans to campaign against the levies in November’s elections.
The optimism also supported emerging-market and high-yielding currencies battered by a flight to safe havens such as the dollar and Japanese yen.
South Africa’s rand rose 1.3 percent, the Russian ruble gained 0.8 percent and the Australian dollar jumped one percent. The South Korean won put on 0.6 percent while the Indonesian rupiah gained 0.3 percent.
Energy firms also climbed with investors keeping tabs on Hurricane Florence as it surges towards the US east coast, with the Carolinas and Georgia in its crosshairs.
Concerns about the massive destruction the storm is likely to cause have helped send oil prices higher, while a forecast-beating draw in US stockpiles added to the increase.
While both main contracts dipped slightly Thursday, Japanese energy firm Inpex piled on 3.7 percent, while in Hong Kong PetroChina soared more than five percent and CNOOC rallied almost four percent.
In early European trade London and Frankfurt each dipped 0.1 percent while Paris was flat.
Tokyo – Nikkei 225: UP 1.0 percent at 22,821.32 (close)
Hong Kong – Hang Seng: UP 2.5 percent at 27,014.49 (close)
Shanghai – Composite: UP 1.2 percent at 2,686.58 (close)
London – FTSE 100: DOWN 0.1 percent at 7,307.64
Euro/dollar: DOWN at $1.1618 from $1.1629 at 2100 GMT
Pound/dollar: DOWN at $1.3037 from $1.3053
Dollar/yen: UP at 111.43 yen from 111.25 yen
Oil – West Texas Intermediate: DOWN 48 cents at $69.89 per barrel
Oil – Brent Crude: DOWN 39 cents at $79.35 per barrel
New York – Dow Jones: UP 0.1 percent at 25,998.92 (close)
India diverting attention from Spy’s case?
ISLAMABAD: Minister for Water Resources Faisal Vawda has termed the Indian threat to stop the flow of water from eastern rivers to Pakistan a “failed attempt”, just like the Pulwama incident, to divert attention from its failure in the Kulbhushan Jadhav case in International Court of Justice (ICJ).
In his reaction over India’s threat to stop Pakistan’s water, he said India could not blame Pakistan for its failure in the International Court of Justice to prove spy Kulbhushan innocent. As per Indus Water Treaty, India could not stop Pakistan’s water, he added, says a press statement here on Friday.
Describing the threat hilarious and void, he said the Indian government was preparing the ground to seek public support in next election by hurling allegation against Pakistan. “India must keep it in mind that it is a New Pakistan,” Vawda said adding that valiant Armed Forces of Pakistan would give a befitting response if India launched any misadventure. He said India would get nothing from its war hysteria except embarrassment among the comity of the nations.
Pilot drinking delays Japan plane
TOKYO: Japan’s All Nippon Airways said today it was forced to delay a domestic flight earlier this week after a co-pilot failed an alcohol breath test despite new rules.
The case came after Japan introduced fresh regulations to clamp down on alcohol consumption by pilots after several incidents involving flight crew drinking hit the headlines. On Tuesday, the ANA co-pilot was scheduled to fly a Boeing 777 with 322 passengers on board from Kobe in western Japan to Haneda airport in Tokyo.
But he failed a breath test and said he had consumed a can of beer and half a can of a spirit-based drink in his hotel room about six hours before the flight. The flight was delayed by more than an hour while a replacement pilot was found. The airline said in a statement it would deal with the case “rigorously”. It has banned pilots and co-pilots from drinking alcohol up to 24 hours before a flight.
Late last year, a Japan Airlines co-pilot arrested in Britain was jailed for 10 months after being found shortly before a flight with a blood alcohol level almost 10 times the legal limit. He had reportedly consumed two bottles of wine and more than 1.8 liters (nearly four US pints) of beer over six hours on the night before the flight. ANA also revealed last year that a hungover pilot had caused multiple flight delays. Before the rule change in January, Japan had no legal limits on drinking by plane crew members before flights, and breath testing was not required.
S. Korea to begin 5G service in March
SEOUL: South Korea’s finance minister said today that Seoul will become the first country in the world to start commercial operations of fifth-generation mobile network services next month.
Hong Nam-ki made the announcement at a meeting with senior officials on innovation-led growth in Seoul. KT Corp., South Korea’s leading wireless and fixed-line services provider, carried out a world first
trial service of its 5G system during the PyeongChang Winter Olympics last year. 5G data transmission speeds are 40-50 times faster than the existing 4G network or long-term evolution (LTE) and are expected to open a wide range of new business opportunities for the communication service sector.
The system, moreover, allows greater numbers of people to communicate with each other at the same time and promises to open vast markets for devices and services. The finance minister also said KT and two other local competitors – SK Telecom Co. and LG Uplus Inc. – will invest some 3 trillion won (US$2.6 billion) this year to set up seamless 5G connectivity in the country going forward.