Markets rise amid mixed signals on trade war

AMID A DAY of mixed messages on the trade war front, markets chose to focus on Thursday's positive news items to continue an upward trend from the day before.

The US scored a point as China resumed buying American soybeans, a first step in holding up agreements made in the Dec 1 meeting between US President Donald Trump and Chinese President Xi Jinping. According to the US Soybean Export Council, Chinese importers purchased 1.5 million to two million metric tonnes in the nation's first significant purchase of US soybeans since July.

The Wall Street Journal also reported that China is revising its Made in China 2025 industrial policy, potentially delaying some targets in its plan to dominate high-end technologies and providing greater access for foreign companies. This could help ease tensions with the US, which has called for concrete timelines and actions from China to balance trade and open its markets to foreign companies.

However, tensions between Canada and China after the arrest of a Huawei executive on Washington's request have not eased even following her release on bail on Tuesday. A second Canadian was questioned by the Chinese authorities, and the Canadian government has since lost contact with him.

FXTM research analyst Lukman Otunuga noted that the positive effects of easing trade tensions may be shortlived in view of several obstacles looming ahead.

"Global equity bulls remain threatened by concerns over plateauing global economic growth, Brexit turmoil and political risk in France among many other geopolitical risk factors," he wrote in an afternoon report.

Nevertheless, markets were happy to enjoy the good news while it lasted. The Hong Kong and Chinese markets notched the most gains, with the Hang Seng index picking up 1.29 per cent to close at 26,524.35.

The Shanghai Composite Index advanced 1.23 per cent to 2,634.05, while the Shenzhen Composite added 1.11 per cent to 1,360.92.

In Japan, the Nikkei 225 ticked up 0.99 per cent to 21,816.19, and Australia, South Korea and Malaysia all closed higher.

Singapore's Straits Times Index (STI) advanced for a second session amid thin trading, climbing 0.36 per cent or 11.09 points to 3,111.08. It closed up 1.33 per cent at 3,099.99 on Wednesday.

Half of the 30 STI constituents ended the day in the black, with the remainder evenly split between counters that ended flat and lower.

Turnover on the bourse was 891.4 million shares worth S$893.1 million, compared to 1.1 billion worth S$968.3 million on Wednesday. Gainers and losers were matched at 186 to 186.

Thursday's most heavily traded counter was casino operator Genting Singapore on a volume of 36 million shares. Its shares rose 1.5 per cent or 1.5 Singapore cent to close at S$1.01.

A Bloomberg Intelligence report on Wednesday highlighted Genting as one of two leading candidates in the competition for a casino license in Osaka, Japan, given its strength in building casinos that integrate entertainment and attractions. The city will be hosting the World Expo 2025, which would raise costs but also provide an opening boost for the winning operator.

"The proposed Osaka integrated resort is near Universal Studios and the Osaka Aquarium and would add more attractions and demand drivers to the area. This is key to supporting our forecasted US$2.7 billion in casino revenue," the Bloomberg analysts wrote.

"We believe the mass-market segment will make up a greater portion of gaming revenue, which bodes well for profit gains for the winning operator."

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