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Asian markets stagger as trade war hopes fade, pound struggles

HONG KONG: Asian markets stuttered Tuesday, with investors hobbled by uncertainty over China-US trade talks, while the p

Sep 03 2019

HONG KONG: Asian markets stuttered Tuesday, with investors hobbled by uncertainty over China-US trade talks, while the pound struggled to recover after British Prime Minister Boris Johnson threatened to call a snap election to push through Brexit.

While Donald Trump has said top-level negotiations between the world's top two economies would take place soon, a report said they were having trouble agreeing a schedule for any meeting.

The Bloomberg News story said they had been unable to agree on a US call for parameters for the talks, while Washington turned down Beijing's appeal for a delay to the latest tariffs that kicked in at the weekend.

With the two still at loggerheads, Chinese media blamed the White House.

"It is time the US administration reconsidered its poorly thought-out China-bashing moves," the China Daily said in an editorial. "Working to secure a trade deal would be a more fruitful approach."

The Bloomberg report added to concerns that there will be no resolution to the row anytime soon.

"If they're struggling to decide simple itinerary, expectations for anything tangible to arise from the trade talks are looking incredibly dim at this point," said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

Regional markets swung in early trade, with investors given no direction by Wall Street, which was closed for Labor Day.

Oil prices edged down again, extending Monday's sharp sell-off on concerns about data showing a lift in output from OPEC and Russia, despite a pledge from them to reduce production.

- 'Tumultuous few days' ahead -

Hong Kong was flat and Tokyo went into the break 0.1 percent higher, with Shanghai down 0.2 percent.

Sydney was barely moved, Singapore edged up 0.2 percent and Seoul was off 0.1 percent. Wellington and Jakarta were slightly higher but there were losses in Taipei and Manila.

High-yielding currencies were down against the relatively safe-haven dollar, while the yuan fell to fresh 11-year lows.

The pound also remained under pressure after Johnson's warning that he will call a general election for October 14 if rebel MPs in his ruling Conservative party vote to force him to delay Brexit again.

"We are leaving on October 31, no ifs or buts," he said in a statement outside 10 Downing Street.

Sterling sank around one percent against the greenback Monday, with weak factory figures adding to the sell-off, and extended the losses in Asia.

Jeffrey Halley, senior market analyst at OANDA, said: "With electoral uncertainty and the prospects of a hard Brexit both rising exponentially, the British pound was punished."

Anti-Brexiters are planning to hold their vote Tuesday as lawmakers return from the summer break.

While opinion polls have the Conservatives well ahead of the opposition Labour party, Tapas Strickland, senior analyst at National Australia Bank, warned: "The scene is thus set for a tumultuous few days that is likely to see (the pound) come under further pressure

Copyright AFP (Agence France-Press), 2019