Asia shares rest at highs, sterling licks wounds
By Wayne Cole SYDNEY (Reuters) - Asian stocks took a breather at 18-month peaks on Wednesday having climbed for five straight sessions, while the British pound was licking its wounds as revived Brexit fears came back to bite it. MSCI's broadest index of Asia-Pacific shares outside Japan was dead flat in thin early trade, just off its highest since June last year.
By Wayne Cole
SYDNEY (Reuters) - Asian stocks took a breather at 18-month peaks on Wednesday having climbed for five straight sessions, while the British pound was licking its wounds as revived Brexit fears came back to bite it.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was dead flat in thin early trade, just off its highest since June last year.
Japan's Nikkei <.N225> dipped 0.1% and away from its 2019 top, while Korean shares <.KS11> edged up 0.1% to an eight-month peak. E-Mini futures for the S&P 500
Upbeat economic news had helped the S&P 500 reach a record for the fourth straight session, building on its 27% gain this year. The Dow <.DJI> ended Tuesday up 0.19%, while the S&P 500 <.SPX> gained 0.07% and the Nasdaq <.IXIC> 0.11%. [.N]
U.S. housing starts were surprisingly strong in November, and building permits rose to the highest level since May 2007. Manufacturing output picked up more than expected as a strike at General Motors Co
A run of better data recently has helped calm fears of recession while the phase one Sino-U.S. deal on trade seems to have lifted some of the uncertainty on the global outlook.
The sea change was clear in BofA Global Research's latest survey of fund managers with recession concerns diving 33 percentage points to a net 68% of investors saying a recession is now unlikely in 2020.
Global growth expectations jumped 22 percentage points, marking the biggest 2-month rise on record. As a result, funds' allocation to global equities climbed 10 percentage points to a net 31% overweight, the highest level in a year.
Yet it might be too soon to declare an all-clear on the political front with UK Prime Minister Boris Johnson upsetting markets by taking a hard line on Brexit talks.
Johnson will use the prospect of a Brexit cliff-edge at the end of 2020 to demand the EU give him a comprehensive free trade deal in less than 11 months.
The threat of a hard exit sent shivers through sterling, which slid 1.5% in its largest one-day fall this year.
The pound was last at $1.3110
"We treat the risk of a hard Brexit as a 'tail risk' at this stage," said Joseph Capurso, a senior currency strategist at CBA. "A UK‑EU trade deal by end 2020, while difficult, is still possible."
"In our view GBP/USD will remain supported at around $1.3000‑$1.3100 and upside contained near $1.3500 over the next several months."
Sterling's slide gave the dollar index a lift to 97.184 <.DXY> against a basket of currencies, extending a bounce from last week's five-month low of 96.588.
The euro also surged on the pound
Spot gold was idling at $1,475.90 per ounce
Oil prices eased from three-month highs as data showed U.S. crude stocks rose unexpectedly in the most recent week. [O/R]
(Editing by Sam Holmes)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.