Asia hopes for best in trade talks, Brexit vote

    Support. A currency dealer working at a dealing room of a bank in Seoul, South Korea. Trade-exposed Asian currencies got some support on Tuesday from upbeat comments on the progress of US-China trade negotiations. (Reuters Photo)
    Support. A currency dealer working at a dealing room of a bank in Seoul, South Korea. Trade-exposed Asian currencies got some support on Tuesday from upbeat comments on the progress of US-China trade negotiations. (Reuters Photo)

    SYDNEY- Asian share markets made guarded gains on Tuesday amid cheery chatter about the chance of a Sino-US trade deal, while investors were sanguine yet another vote on Brexit would still avert a hard exit for the UK.

    A holiday in Tokyo kept turnover light and MSCI’s broadest index of Asia-Pacific shares outside Japan added a modest 0.3 percent.

    Futures for Japan’s Nikkei were trading at 22,760, compared to Monday’s index close at 22,548. South Korean stocks rose 0.9 percent and Shanghai blue chips were flat.
    E-Mini futures for the S&P 500 gained 0.15 percent.

    China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, no problem could not be resolved.

    US President Donald Trump sounded upbeat on a China deal on Monday, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well.

    Trade-sensitive technology stocks rose 1.1 percent, pulling the S&P 500 up 0.69 percent and near to a record closing high. The Dow gained 0.21 percent, while the Nasdaq rose 0.91 percent.

    The better mood saw safe-haven bonds extend their recent pullback, with 10-year Treasury yields at a five-week peak of 1.80 percent.

    In foreign exchange markets, the dollar found support against the yen at 108.64 while staying steady on a basket of currencies to 97.289.

    The euro paused after its recent run higher and was last trading quietly at $1.1151.

    Sterling held firm at $1.2977 after Prime Minister Boris Johnson failed to get a vote on his Brexit deal and will try again on Tuesday to get the first stage of a withdrawal bill through Parliament.

    “If the House of Commons vote in favor of the deal, GBP/USD could rally towards $1.3500 over the medium term. The UK would then enter a transition period that lasts until 31 December 2020,” said Kim Mundy, a currency strategist at CBA.

    “If the Commons rejects the deal, GBP/USD will likely stabilize around $1.2800, because the risk of a hard Brexit will remain low,” he added. “Early UK general elections would be the next most logical way forward.”

    The Canadian dollar kept its recent gains at C$1.3080 per US dollar as CBC TV predicted the ruling Liberal government of Justin Trudeau had won re-election.

    In commodity markets, spot gold was idling at $1,483.98 per ounce.

    Oil prices were little moved as the market fretted about the health of the global economy and the future for energy demand.

    Brent crude futures were steady at $58.96, while US crude added 5 cents to $53.36 a barrel.

    The Dow Jones Industrial Average rose 57.44 points, or 0.21 percent, to 26,827.64, the S&P 500 gained 20.52 points, or 0.69 percent, to 3,006.72 and the Nasdaq Composite added 73.44 points, or 0.91 percent, to 8,162.99.

    This week’s earnings lineup includes high-profile companies such as Boeing, Microsoft Corp, Procter & Gamble Co, United Parcel Service Inc and Caterpillar Inc.

    According to data from Refinitiv, analysts have projected the first earnings contraction since 2016 for S&P 500 companies. But of the 75 companies that have reported results so far, only 12 percent have come short of earnings estimates.

    Halliburton Co shares gained 6.4 percent after the oilfield services provider detailed further planned cost reductions.

    Coty Inc shares surged 13.4 percent after the cosmetics maker said it planned to sell its professional beauty business with brands such as Wella and OPI.

    US-listed shares of Teva Pharmaceutical Industries Ltd jumped 8.7 percent after the company announced progress toward settling remaining opioid-related litigation.

    Advancing issues outnumbered declining ones on the NYSE by a 1.95-to-1 ratio; on Nasdaq, a 2.09-to-1 ratio favored advancers.

    The S&P 500 posted 41 new 52-week highs and two new lows; the Nasdaq Composite recorded 93 new highs and 64 new lows.

    Volume on US exchanges was 5.92 billion shares, which was below the 6.55 billion average for the the last 20 trading sessions. – Reuters