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Asian markets gain after US suspends government shutdown

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BANGKOK — Shares rose in Asia on Monday after President Donald Trump temporarily re-opened the U.S. government. Japan was the main regional outlier, as the Nikkei 225 index lost 0.5 per cent to 20,759.48 with uncertainty over China-U.S. trade talks bringing a lull in buying sentiment.

KEEPING SCORE: Hong Kong’s Hang Seng index gained 0.3 per cent to 27,657.27 and the Shanghai Composite index climbed 0.3 per cent to 2,610.14. The Kospi in South Korea edged 0.2 per cent higher to 2,181.08 while India’s Sensex was flat at the open. Markets in Southeast Asia were mostly higher. Australia’s markets were closed for a national holiday.

U.S. GOVERNMENT RE-OPENS: There was muted reaction in U.S. markets on Friday to news that Trump and congressional leaders had reached a deal to reopen the federal government for three weeks while talks continue over Trump’s demands for money to build a wall along the U.S. border with Mexico. Trump announced the agreement to break the 35-day impasse as delays at airports and widespread disruptions heightened the urgency to end the partial shutdown. However, uncertainty persists since Trump almost immediately threatened another shutdown or emergency action if he does not get a “fair deal.”

ANALYSTS’ VIEWPOINT: “So the US government being ‘open’ again is a relief. But the greater challenge ahead is to prevent another shut-down come 15th Feb. and to that end, headway in talks between Republicans and Democrats over the next three weeks is critical,” Mizuho Bank said in a commentary. “While how open both sides are on a border security deal remains in the foreground, it is the U.S.-China trade talks (Wed.-Thu.) that will be in the limelight.”

TRADE TALKS LOOM: Talks aimed at resolving the impasse over Chinese technology ambitions and other issues are due to resume in Washington later in the week, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. Analysts are forecasting progress in redressing the trade imbalance between the world’s two largest economies, perhaps staving off further hikes in punitive tariffs imposed by both sides, but they expect gaps to remain on key problems such as China’s blueprint for state-led development of leading technologies.

WALL STREET: Stocks closed higher Friday, recovering a chunk of their losses from earlier in the week. Technology and industrial companies jumped as companies continued to report solid results for the fourth quarter. The S&P 500 index rose 0.85 per cent to 2,664.76, but the index fell 0.2 per cent for the week after big gains in the previous four. The Dow Jones Industrial Average added 0.7 per cent, to 24,737.20. The Nasdaq composite surged 1.3 per cent to 7,164.86 while the Russell 2000 index of smaller company stocks also increased 1.3 per cent, to 1,482.85.

ENERGY: U.S. crude oil shed 33 cents to $53.36 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1.1 per cent to settle at $53.69 per barrel on Friday. Brent crude, used to price international oils, gave up 26 cents to $61.38 per barrel. It had gained 0.9 per cent on Friday to $61.64 per barrel.

CURRENCIES: The dollar was trading at 109.36 yen down from 109.55 yen on Friday. The euro strengthened to $1.1420 from $1.1409.

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