GLOBAL MARKETS-Asian shares feeling blue as Shanghai turns red




* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Nikkei rises 1.5% after Wall St bounce, yen dips

* Dollar firms on better U.S. data, higher yields

* Shanghai shares slip as Trump targets Huawei

By Wayne Cole

SYDNEY, May 17 (Reuters) - Asian shares were struggling to end a bleak week in the black on Friday as upbeat U.S. economic news and solid company earnings offered only a fleeting respite from the interminable Sino-U.S. trade dispute.

Shanghai stocks slipped amid the fallout from President Donald Trump's move to block China's Huawei Technologies from buying vital American technology.

The Communist Party's People's Daily used a front page commentary to evoke the patriotic spirit of past wars, saying the trade war would never bring China down.

"It is hard to get too excited as the news flows in the trade front points to an escalation rather than an ease in tensions," said Rodrigo Catril, senior FX strategist at National Australia Bank.

"Many commentators are suggesting the decision on Huawei and other Chinese telecos effectively means the President has taken the 'nuclear option' and it has now moved towards a 'fully-fledged' tech war with China."

For now, Asian markets were just happy for a break.

Japan's Nikkei bounced 1.5%, while the main Australian index climbed 0.9% to an 11-year peak as higher commodity prices boosted miners. E-Mini futures for the S&P 500 edged up 0.1%.

The cheer had yet to spread to Shanghai blue chips , which slipped 1.3%, while the yuan eased toward the 6.9000 per dollar level.

MSCI's broadest index of Asia-Pacific shares outside Japan lost early gains to dip 0.1%. It was just above a 15-week trough but down 2% for the week.

Sentiment had been bolstered overnight by better U.S. economic news, with U.S. housing starts surprisingly strong and a welcome pickup in the Philadelphia Federal Reserve's manufacturing survey.

Upbeat results from Walmart burnished the outlook for retail spending, though the giant chain also warned that tariffs would raise prices for U.S. consumers.

As the earnings season winds down, of the 457 S&P 500 companies reporting about 75% have beaten profit expectations, according to Refinitiv data.

The Dow ended Thursday with gains of 0.84%, while the S&P 500 added 0.89% and the Nasdaq 0.97%.


DOLLAR IN DEMAND

The pullback in risk aversion lifted Treasury yields, particularly at the short end where two-year yields rose to 2.19 percent.

Bond prices might also have been pressured by a speech from influential Fed Governor Lael Brainard who said the central bank could encourage "opportunistic reflation" by allowing inflation to run above its 2% target for some years.

The rise in yields underpinned the U.S. dollar, which hit a two-week high against a basket of currencies at 96.882 before steadying at 97.831.

The dollar regained a little lost ground on the safe-haven yen to stand at 109.92, while the euro eased to $1.1175 and was off 0.5% for the week so far.

Sterling was one of the worst performers as Britain's Prime Minister Theresa May battled to keep her Brexit deal, and her premiership, intact amid growing fears of a disorderly departure from the European Union.

The pound touched a three-month low of $1.2780 and was down a hefty 1.6% for the week so far.

Also under pressure was the Australian dollar, losing 1.5% for the week to $0.6895 as investors piled into bets that interest rates would be cut in June.

In commodity markets, spot gold dropped off to $1,285.57 per ounce as risk sentiment improved.

Oil futures firmed into a fourth session as rising tensions in the Middle East stoked fears of potential supply disruptions.

U.S. crude was last up 50 cents at $63.37 a barrel, while Brent crude futures rose 44 cents to $73.06.

(Editing by Kim Coghill & Shri Navaratnam)

COMMENTS

More Related News

Powerful, obscure law is basis for Trump
Powerful, obscure law is basis for Trump 'order' on trade

President Donald Trump is threatening to use the emergency authority granted by a powerful but obscure federal law to make good on his tweeted "order" to U.S. businesses to cut ties in China amid a spiraling trade war between the two nations. China's announcement Friday that it was raising tariffs on $75 billion in U.S. imports sent Trump into a rage and White House aides scrambling for a response. Trump fired off on Twitter, declaring American companies "are hereby ordered to immediately start looking for an alternative to China." He later clarified that he was threatening to make use of the International Emergency Economic Powers Act in the trade war, raising questions about the...

Mon dieu! Donald Trump arrives at G7 summit in France amid tensions, threat of tariffs on French wines
Mon dieu! Donald Trump arrives at G7 summit in France amid tensions, threat of tariffs on French wines

Fears of a global recession and a mélange of other issues awaited President Donald Trump and other G7 leaders as they arrived in Biarritz, France.

Factbox: From phone makers to farmers, the toll of Trump
Factbox: From phone makers to farmers, the toll of Trump's trade wars

China said it would slap retaliatory tariffs on about $75 billion worth of U.S. goods, while President Donald Trump announced a 5 percentage-point hike in tariffs already in place and others set to take effect next month. Trump also demanded that U.S. companies take steps to exit China, throwing a new twist into a bitter trade war now in its second year, although Trump cannot legally compel U.S. companies to abandon China immediately.

Danish leader speaks with Trump amid Greenland dispute
Danish leader speaks with Trump amid Greenland dispute

Danish Prime Minister Mette Frederiksen has had a phone conversation with U.S. President Donald Trump amid a dispute about Greenland, her office said Friday. Earlier this week, Trump scrapped a visit to Denmark by saying that Frederiksen was "nasty" when she rejected his idea of buying Greenland as an absurdity. Both leaders spoke late Thursday, and Danish media reported that the call was "constructive." Frederiksen's office says details of the discussion won't be released.

These are the few Republicans that may challenge Trump in the 2020 primaries
These are the few Republicans that may challenge Trump in the 2020 primaries

Recently, as many as four Republicans have toyed with the idea of running against Donald Trump for the Republican presidential nomination in 2020. Trump already has one official primary challenger in Bill Weld, the former GOP governor of Massachusetts.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Internet

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.