Asian equities remain stable after heavy losses; Saudi comments raise oil


SHANGHAI (Reuters) – Asian stock markets enjoyed a steady start on Monday as investors tried to catch their breath after a week of growing trade tensions between the United States and China.

FILE PHOTO: A man looks at an electronic chart showing the Nikkei stock index outside a broker in Tokyo, Japan on January 7, 2019. REUTERS / Kim Kyung-Hoon

At the beginning of trading, the broader Asia-Pacific MSCI equity index outside Japan retreated 0.6% after a sharp 3% loss the week before. US S & P 500 e-mini futures also rose, up 0.5% following losses on Wall Street on Friday.

The Dow Jones Industrial Average fell 0.38%, the S & P 500 0.58% and the Nasdaq Composite 1.04%.

Australian stocks jumped 1.4% after the shocking victory of the center-right Liberal National Coalition in the federal election, beating the leftist Labor Party.

Japan's Nikkei stock index rose 0.4%, after data showed that growth in the world's third-largest economy unexpectedly accelerated in the first quarter.

Monday's modest gains came as the financial markets continued to struggle with the intensification of the Canada-US trade war. The Trump administration last week added Huawei Technologies Co Ltd to blacklist trade.

The consequences of this decision are obvious because Google suspends the activities of Alphabet Inc. with Huawei, which requires the transfer of hardware, software and technical services, with the exception of those accessible to the public via open source licenses.

The suspension of Google's activities with Huawei "indicates that, even though trade negotiations are considered stalled, when we take China into account, we declare that it is useless for US negotiators to go to Beijing in the current circumstances as they had done on Friday, then Greg McKenna, quarterback at McKenna Macro, said in a note to customers.

Noting that the trade war was coming to an end, that uncertainty remained about Brexit and that tensions between the United States and Iran were increasing, Mr. McKenna said that investors are currently making the subject of a "front page trading".

"(It is) too early to see the economic consequences of the battle intensifying.And so the belief can be suspended until then," he said.

The oil markets, however, have become commercially active as soon as the Saudi energy minister said on Sunday that there is a consensus among members of the Organization of the Petroleum Exporting Countries to maintain production cuts in an effort to reduce oil prices. "Smoothly" stocks.

US crude and Brent crude prices jumped more than 1% following comments by the minister, with West Texas Intermediate reaching $ 63.51 per barrel and Brent crude at $ 73.05 per barrel.

In the foreign exchange market, the Chinese offshore yuan rebounded after touching its weakest level against the dollar since last November. He was trading for the last time at $ 6.9280 for a dollar.

On Friday, in the onshore trade, the yuan lost its psychologically important importance of 6.9 to the dollar and reached its lowest level in 19 weeks. However, according to some sources, the country's central bank should resort to foreign exchange intervention and monetary policy instruments to prevent its weakening to a level close to $ 7 per dollar in the short term.

On Monday, the dollar rose 0.2% against the yen to 110.30, and the euro rose 0.1% to 1.165 dollars.

The dollar index, which compares the greenback to a basket of six major rivals, edged down to 97,980.

The benchmark 10-year Treasury yield rose to 2.4068% from a US closing of 2.393% on Friday, while the two-year yield reached 2.2187%, up from the US close. 2.202%.

Spot gold was up 0.1% to $ 1,278.82 an ounce. [GOL/]

Reportage by Andrew Galbraith; Edited by Shri Navaratnam

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