Thursday , August 24 2017
Home / Business / Asian markets see broad rebound after Trump sell-off

Asian markets see broad rebound after Trump sell-off

Asian markets see broad rebound after Trump sell-off

Asian markets mostly bounced Tuesday from the previous day’s hefty sell-off, with hopes Donald Trump can push through his economy-boosting agenda despite last week’s healthcare debacle.

However, with expectations about the rate of future US interest rate hikes receding the dollar is struggling to break back against its major peers.

Markets across the world tumbled after the tycoon’s repeal of Obamacare fell at the first hurdle Friday as he failed to garner enough votes from his own Republican party, who control both houses of Congress.

The failure fuelled worries Trump would not be able to drive his much-vaunted tax-cutting, infrastructure spending, deregulation plans with analysts pointing out it will leave the administration with less cash to pay for such measures. Hopes for his plan helped fuel a surge in global markets and the dollar since the November election.

While New York and European markets ended on a low, they were well off their early losses and provided Asian traders with something to play with as the dust settles after Trump’s bruising defeat.

“What seems to be going on in US stocks is that president Trump is being given the benefit of the doubt that he will be able to deliver on tax and infrastructure,” said Greg McKenna, chief market strategist at AxiTrader.

Tokyo ended the morning session 1.1 percent higher, having slumped 1.4 percent Monday.

Hong Kong added 0.6 percent and Sydney rallied more than one percent while Seoul put on 0.2 percent, Singapore 0.5 percent and Taipei 0.3 percent.

– ‘Buying opportunity’ –

“On balance the underpinnings are strong enough that we want to stay long” on stocks, Ted Weisberg, president at New York brokerage Seaport Securities, told Bloomberg TV. “We are viewing any kind of selloff as a buying opportunity.”

However, while equities picked up, the dollar remained subdued, sitting at four-month lows against the yen. The euro has been buoyed by upbeat data out of the eurozone.

Weighing on the greenback were comments from the head of the Chicago branch of the Federal Reserve Charles Evans that it might only need to lift borrowing costs twice this year considering an uncertain outlook for inflation and Trump’s big-spending, tax-cutting agenda.

The yen has climbed more than seven percent against the dollar since the start of the year while the single currency is up about five percent. Even the pound, which was battered last year by Britain’s vote to leave the European Union has risen five percent from its January lows.

The US unit had already been under pressure after Fed boss Janet Yellen said this month that the pace in rate hikes would be slower than initially expected.

“The market will be… interested — or hoping (vainly) for new insights from Fed Chair Yellen’s address” later Tuesday, said David de Garis, director of fixed income, currencies and commodities at National Australia Bank, in a commentary.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: 1.1 percent at 19,189.39 (break)

Hong Kong – Hang Seng: UP 0.6 percent at 24,326.40

Shanghai – Composite: DOWN 0.2 percent at 3,260.42

Euro/dollar: DOWN at $1.0864 from $1.0865

Pound/dollar: UP at $1.2565 from $1.2562

Dollar/yen: DOWN at 110.60 yen from 110.65 yen

Oil – West Texas Intermediate: UP 24 cents at $47.97 per barrel

Oil – Brent North Sea: UP 19 cents at $50.94

New York – Dow: DOWN 0.2 percent at 20,550.98 (close)

London – FTSE 100: DOWN 0.6 percent at 7,293.50 (close)

–AFP