You are here
Asia: Markets take breather after oil-fuelled rally
[HONG KONG] Asian traders trod carefully Tuesday as profit-taking from the previous day's rally offset a healthy lead from Wall Street, while the pound briefly fell after authorities said a blast in Manchester could be terror-related.
Global markets pushed higher Monday as energy firms benefited from a surge in oil prices as Opec and Russia look set to extend an output cut, while US dealers welcomed an optimistic survey on US manufacturing.
But crude was unable to press on with gains on Tuesday, weighing on petroleum-linked firms ahead of a meeting between Opec and Russia later in the week.
With Donald Trump on his first overseas trip, the political crisis that drove huge losses last week has calmed for now.
However, the Washington Post reported that the president had asked two top intelligence officials in March to help push back against an FBI probe into his campaign's possible links with Russia.
Markets were hammered on fears about Mr Trump's economy-boosting agenda with his presidency engulfed in a crisis over his firing of FBI chief James Comey and allegations he disclosed sensitive intelligence to Russian officials.
"Thankfully there's been a pleasant reprieve for the Comey/Trump headlines, but the melodrama is expected to pick up after (US) Memorial Day and (British) Spring Bank Holiday when Trump returns to Washington," said Stephen Innes, senior trader at Oanda, in a note.
Hong Kong added 0.3 per cent, Shanghai slipped 0.2 per cent, Seoul was up 0.7 per cent and Sydney eased 0.1 per cent while Tokyo also gave up 0.1 per cent by the break.
On foreign exchanges the pound fell to US$1.2974 from close to US$1.30 late in New York after police said they were treating as terror-linked an explosion that killed at least 19 people outside a concert in Manchester.
If it is proved to be a terror attack it would be the worst since the London bombers killed 52 people in 2005.
However, sterling later recovered most of its losses.
Traders are now awaiting the release this week of minutes from the Federal Reserve's latest policy meeting, hoping for some clarity on its plans for hiking interest rates in light of recent disappointing US data while a number of board members will also be speaking.
There was also little initial movement from the release of Mr Trump's 2018 budget, which proposes billions of dollars in spending cuts over the next 10 years and increased military spending.