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Asia: Most markets start week on positive note
[HONG KONG] Most Asian markets rose on Monday as investors grow hopeful that China and the United States will resolve their trade dispute.
Wall Street ended last week with gains following a report that top officials from the world's top two economies will hold talks to resolve a crisis that has seen them hit each other with tariffs on billions of dollars worth of goods with more in the pipeline.
The report in the Wall Street Journal said the talks were aimed at easing the trade dispute before Donald Trump and Chinese President Xi Jinping hold a summit in November.
The possibility that the months-long row that has battered world markets could be brought to an end was enough to lift optimism on trading floors.
Greg McKenna, chief market strategist at AxiTrader, pointed out that Beijing, which is struggling to support the economy while also addressing a debt mountain, may have had a "lightbulb moment" last week with the release of more weak data and a sharp drop in the troubled yuan.
Authorities in China appeared to be moving to support the yuan last week as it headed towards seven to the dollar, its weakest level since January 2017. Some observers have suggested the central bank has been letting the yuan soften in recent weeks to offset the effects of any US tariffs, a claim China has denied.
"President Trump is winning again," he said. "That's the takeaway he's likely to get from news that China's resolve may be cracking and the trade delegation being sent to Washington is not as low level as many thought."
Hong Kong rose 1.1 per cent in the morning session and Shanghai was up 0.8 per cent, while Sydney climbed 0.2 per cent and Seoul added 0.3 per cent.
Singapore, Wellington, Taipei and Jakarta were also well up.
Tokyo pared early losses to head into the break 0.2 per cent lower.
On currency markets the Turkish lira was hovering around six to the dollar, well off the record levels around seven seen last week but still under pressure after Ankara and Washington traded fresh sanctions threats as the row over a jailed American pastor drags on.
Ratings agency Standard & Poor's on Friday downgraded Turkey's sovereign debt for the second time in four months and warned of a recession in 2019.
"The worry over Turkey's currency crisis eased slightly last week as the lira rebounded against the US dollar. But this isn't the end of the problem," said Masayuki Kubota, chief strategist at Rakuten Securities.
Attention now turns to the annual bankers' symposium at Jackson Hole, Wyoming, this week which will be followed for US interest rate plans, among other things.