Stocks inch up on trade hopes but growth fears temper gains

TOKYO,. Global shares ticked up today after US Treasury Secretary Steven Mnuchin said US-China trade talks will resume next month, but lingering concerns about slowing global growth tempered the overall appetite for riskier assets.

MSCI’s broadest index of Asia-Pacific shares outside Japan moved up 0.06 per cent, supported by 0.4 per cent gains in mainland Chinese shares, while Japan’s Nikkei edged up 0.20 per cent after a market holiday yesterday.

US stock futures gained 0.39 per cent, helped by comments from US Treasury Secretary Steven Mnuchin that US-China trade talks will resume next week. He later clarified that the negotiations will take place in two weeks.

“The comments gave a little bit of boost to sentiment, but markets are still not that optimistic either,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

“It seems there have been a lot going on behind the scenes,” he said, referring to unusual exchanges in which US President Donald Trump questioned a decision by his top trade negotiators to ask Chinese officials to delay a planned trip to US farming regions.

That cancellation was seen by markets as a sign all is not well in the US-China talks and helped to send share prices lower on Friday.

The dispute between the world’s two largest economies has dragged on for well over a year, rattling investors and denting global growth.

Concerns over a slowing global economy remained front and centre for financial markets, as poor business activity readings from the euro zone deepened fears of a recession and suggested more stimulus was required.

“While the Nikkei was fairly well supported, we need more catalysts to further rises. That’s also true for US markets as well,” said Takeo Kamai, head of execution service at CLSA.

“While speculators have reacted to the trade-related headlines, real-money people appear to be staying on the sideline.”

The euro wobbled at US$1.0991 (RM4.59), falling below a key support around US$1.10 and not far from a 28-month low of US$1.0926 touched earlier this month.

Sterling also slipped to US$1.2435, having peaked at a two-month high of US$1.2582 set on Friday as traders looked to a Supreme Court ruling on whether Prime Minister Boris Johnson misled Queen Elizabeth over his reasons for suspending parliament this month.

The Supreme Court said it will issue its decision at 0930 GMT today.

The collapse of the British travel firm Thomas Cook could also put some pressure on the pound by highlighting the weakness of British retailing.

The yen traded at ¥107.57 per dollar, having hit two-week highs of 107.32 yesterday.

US Treasuries yields extended their decline, with the 10-year rate falling to 1.716 per cent, edging down further from 1.908 per cent marked on September 13.

Oil prices dipped slightly but were still supported by doubts on whether Saudi Arabia would be able to restore full output as it has promised after the September 14 attacks on its facilities.

Brent crude futures fell 0.42 per cent to US$64.50 a barrel while US West Texas Intermediate (WTI) crude lost 0.34 per cent to US$58.44 per barrel. — Reuters

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