Asian shares tiptoe higher, sterling wounded before BoE

By Stanley White TOKYO (Reuters) - Asian shares edged higher on Thursday amid growing confidence in the global outlook following improving economic indicators and a preliminary trade deal between the United States and China. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.08%

Reuters December 19, 2019 07:08:10 IST
Asian shares tiptoe higher, sterling wounded before BoE

Asian shares tiptoe higher sterling wounded before BoE

By Stanley White

TOKYO (Reuters) - Asian shares edged higher on Thursday amid growing confidence in the global outlook following improving economic indicators and a preliminary trade deal between the United States and China.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.08%. Australian shares <.AXJO> were up 0.07%, while Japan's Nikkei stock index <.N225> slid 0.12%.

The pound nursed heavy losses due to concerns Britain could still crash out of the European Union without a trade deal in place after a transition period ending in December 2020.

Traders also await a Bank of England (BoE) policy meeting later Thursday. No change in policy is expected, but the meeting could pose further downside risks for sterling if more policymakers swing to the dovish camp and vote for an interest rate cut.

Overall sentiment was supportive of equities and riskier assets, but less favourable for safe-haven assets like bonds due to expectations that economic growth will start to pick up next year after a tumultuous 2019.

"Data has been generally supportive of an improvement in economic performance," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.

"Investors can look forward to stronger growth next year, but a lot of this has already been reflected in share markets."

Traders are also monitoring a vote in the Democrat-led U.S. House of Representatives over whether to impeach Republican U.S. President Donald Trump.

However, market reaction is unlikely to be significant given it is widely expected that the Republican-controlled Senate will not vote to remove Trump from office.

U.S. stock futures edged 0.02% lower in Asia on Thursday. The S&P 500 <.SPX> fell 0.04% on Wednesday, weighed by a steep drop in FedEx Corp shares after the U.S. parcel delivery company cut its fiscal 2020 profit forecast.

Earlier in the session, the S&P 500 hit its fifth consecutive record high, and analysts said market sentiment remained largely upbeat following last week's announcement of an initial U.S.-China trade agreement.

Other analysts pointed to recent data releases showing economic improvements in China, the United States and Germany as reasons to be more optimistic.

In the currency market, sterling traded at $1.3087, having tumbled more than 3% from an 18-month high struck on Dec. 13 after UK Prime Minister Boris Johnson's Conservative Party scored a landslide victory in a general election.

Against the euro, the pound stood at 84.96 pence, close to its weakest since Dec. 4.

Johnson's government on Tuesday ruled out an extension to the December 2020 deadline for negotiations on a trade deal with the EU, creating a new Brexit cliff-edge and cutting short sterling's post-election rally.

The focus shifts to the BoE's policy meeting later Thursday. At its previous meeting, two of the central bank's nine policymakers voted to cut interest rates.

British inflation remained mired at a three-year low in November, data showed on Wednesday, and uncertainty surrounding Brexit remains high, but this is unlikely to shift expectations that monetary policy will remain on hold.

U.S. crude dipped 0.08% to $60.88 a barrel in Asia after U.S. government data showed a decline in crude inventories.

However, prices are likely to be supported due to production cuts coming from the Organization of the Petroleum Exporting Countries and its allies, including Russia.

(Editing by Sam Holmes)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Global Markets: Stocks ascend to record on economic recovery, vaccine outlook
Business

Global Markets: Stocks ascend to record on economic recovery, vaccine outlook

By Chuck Mikolajczak NEW YORK (Reuters) - A gauge of global stocks hit a record and oil prices jumped on Monday as the newest positive data for a potential COVID-19 vaccine and signs of economic recovery in Asia boosted sentiment. U.S. stocks advanced, with the Dow Industrials setting a record as it neared the 30,000 mark for the first time, after pharma company Moderna said its prospective vaccine was 94.5% effective in preventing the illness, which has crushed economies across the globe

Airbnb IPO filing shows third-quarter earnings beating virus with cost cuts, new focus
Business

Airbnb IPO filing shows third-quarter earnings beating virus with cost cuts, new focus

By Anirban Sen and Joshua Franklin (Reuters) - Airbnb Inc's initial public offering (IPO) registration showed on Monday that the home rental startup turned a profit in the third quarter despite the COVID-19 pandemic, as it gears up for one of the most anticipated stock market debuts in recent years. The filing, published ahead of Airbnb's anticipated stock market debut in December, showed a dramatic recovery in its fortunes, after the coronavirus outbreak dragged down its core home rental business during the first half of the year. The slump forced it to lay off 25% of its workforce in May, suspend marketing activities for the year and seek $2 billion (£1.5 billion) emergency funding from investors, including Silver Lake and Sixth Street Partners, at a valuation of $18 billion

Biden says U.S., allies need to set global trade rules to counter China's influence
Business

Biden says U.S., allies need to set global trade rules to counter China's influence

By David Lawder WASHINGTON (Reuters) - U.S. President-elect Joe Biden said on Monday the United States needed to negotiate with allies to set global trading rules to counter China's growing influence but declined to say whether he would join a new China-backed Asian trade pact signed on Sunday.