Global shares steady, hopes on trade talks

Global share prices have ticked up as some investors clung to hopes that China and the United States could work towards reaching a deal on trade and other issues in the fourth quarter.

Japan’s Nikkei rose 0.6 per cent while MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.11 per cent.

Chinese markets will be shut for a week from Tuesday to mark 70 years since the founding of the People’s Republic of China.

US stock futures rose 0.16 per cent in Asia, a day after the S&P 500 gained 0.50 per cent.

Technology sectors led the gains on Monday while US-listed shares of Chinese firms bounced up a tad, after big balls on Friday, with Alibaba up 0.75 per cent and Baidu gaining 1.53 per cent.

During the July-September quarter, the S&P500 gained 1.21 per cent.

In Europe, the benchmark stock index gained 2.15 per cent in the quarter to end at 16-month high, thanks in part to a weak euro.

White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering delisting Chinese companies from US stock exchanges as “fake news,” giving short-term players an excuse to buy back risk assets.

“Whether it was a fake news or not, it is becoming harder to know exactly what the US administration will be doing,” said Takashi Hiroki, chief strategist at Monex Securities.

“It’s not clear how the US-China talks will progress, given there are hard-liners against China in the administration. But if there’s no further escalation in the upcoming meeting, markets will be relieved,” he added.

China and the United States are due to resume high-level trade talks next week in Washington.

While the tussle over trade and technology between the world’s two largest economies has intensified, some investors are sticking to hopes of a compromise.

A tentative deal could be reached by the end of this year considering the President Donald Trump’s administration would strive to avoid the US economy falling into a recession in an election year, they say.

“While we ought not to have preconception, for Trump, not having made a deal with China could be increasingly seen as negative ahead of the election next year,” said Tomoo Kinoshita, chief global strategist at Invesco Asset Management in Tokyo.

In the currency market, the euro extended its decline on worries about sluggish growth in the currency bloc.

The euro traded at $US1.0897, having slipped to a near 2 1/2-year low of $US1.0885 in US trade on Monday.

The yen was barely changed at 108.08 yen to the dollar , not far from last month’s low of 108.48.

The Japanese currency showed no reaction to the Bank of Japan’s tankan survey showing business confidence at big Japanese manufacturers worsened in the three months to September to its lowest level in six years.

The Australian dollar fetched $US0.6755, near three-week low of $US0.6739 touched last month ahead of a likely rate cut by the Reserve Bank of Australia later in the day.

A majority of 35 economists polled by Reuters expect the RBA to cut the cash rate for the third time this year.

Oil prices were under pressure, wiping out all of their gains after attacks on Saudi Arabian oil facilities last month, on fading concerns of supply shortfalls and conflicts in the Middle East.

US West Texas Intermediate (WTI) crude fell 3.3 per cent on Monday before rise 0.39 per cent early on Tuesday to $US54.28 per barrel.


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