Asia: Markets mixed as dealers struggle to pick up Wall Street rally

[HONG KONG] Asian markets were mixed on Wednesday, with a strong lead from Wall Street offset by lingering concerns about the global economy, while oil prices extended gains after Russia reassured over its intention to cut output.

Trading remains choppy across the region after a key US gauge raised a red flag warning of recession, adding to Federal Reserve worries about growth, uncertainty over Brexit and China's stuttering economy.

However, while the optimism that has characterised most of 2019 has been shaken in recent weeks, a weak round of US data was unable to prevent a rebound in New York Tuesday, with all three main indexes ending higher.

And Oanda senior market analyst Jeffrey Halley said the reaction to the so-called yield curve inversion - which was last seen ahead of the financial crisis a decade ago - had been "quickly consigned to history".

He added that "the volte-face in sentiment suggests to me that despite all the noise, markets are flip-flopping on short-term data as we await the conclusion of the only real game in town: the US-China trade talks".

With a lack of clarification on a number of key issues, markets were fluctuating.

Hong Kong and Shanghai were each 0.3 per cent higher, Wellington jumped one per cent, while Jakarta and Singapore were flat.

But Tokyo went into the break 0.6 per cent lower, Sydney shed 0.2 per cent and Seoul eased 0.1 per cent.

OIL PRICES EXTEND GAINS

While the mood is unsettled in Asia, regional energy firms have been given a lift by rallying oil prices after major producer Russia said it was on track to slash output this month, keeping it on track to fulfilling commitments to a deal with Opec.

"Russia is making good on its promise," Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp, told Bloomberg News.

"Investors are becoming more confident they can trust Russia's relationship with Saudi Arabia, and supply disruptions in Venezuela are raising concerns the market will tighten further."

On currency markets the pound was stable as British MPs prepare to vote on a number of options for the way forward after wresting control of the Brexit debate from Prime Minister Theresa May.

They will now choose whether to cancel Brexit, hold another referendum, vote for a deal including a customs union and single market membership, or leave the EU without a deal, though the government is not bound by law to implement the decision.

However, Mrs May's twice-rejected divorce plan could be revived after Brexit hardliner Jacob Rees-Mogg - one of its most vociferous and high-profile critics said he would back it - while another, Boris Johnson hinted that he also could.

However, it still lacks the vital support of Mrs May's Northern Irish coalition partners, who have denounced it, leading to concerns Britain could be heading for a general election to try to end the stalemate.

AFP