Yahoo Finance Asian Shares Post Weekly Gain as Trade Deal Hope Offsets Brexit Uncertainties
The major Asia Pacific stock indexes finished mostly higher last week with the Hong Kong Index finishing slightly lower. Before moving higher to end the week, investors had to deal with a mixed trade amid fresh uncertainties over Brexit, a positive tone on rising hopes on a U.S.-China trade deal and fresh concerns over a slowdown in the Asian economy.
Last week, Japan’s Nikkei 225 Index settled at 22799.81, up 307.130 or +1.37%. South Korea’s KOSPI closed at 2087.89, up 27.20 or +1.32% and Hong Kong’s Hang Seng Index finished at 26667.39, down 52.19 or -0.20%.
In China, the Shanghai Index settled at 2954.63, up 16.49 or +0.56%. Australia’s S&P ASX 200 Index closed at 6739.20, up 89.50 or +1.35%.
Fresh Uncertainties over Brexit
Early in the week, gains were capped after U.K. Prime Minister Boris Johnson was thwarted by a cross-party group of politicians in Parliament who voted to postpone the “meaningful vote” on his new Brexit deal. That forced Johnson to ask Brussels for an extension to the current October 31 departure deadline, but EU leaders don’t necessarily have to accept it.
And they didn’t. The major Asia Pacific markets mostly fell by the close Wednesday afternoon, as developments on Brexit overnight meant the deadline for the U.K. to leave the European Union would likely be delayed again.
U.K. lawmakers voted to reject a limited time frame for reviewing legislation related to Britain’s withdrawal from the EU. It now means that the U.K. is almost certainly not going to leave the U.K. on October 31 – the current deadline, and the EU may provide an extension to prevent a no-deal occurring.
Rising Hopes on U.S.-China Trade Deal
Offsetting the fresh concerns over Brexit was an improvement in investor sentiment around ongoing negotiations between the United States and China.
Perhaps fueling the positive tone were comments from President Donald Trump’s chief economic adviser Larry Kudlow, who said while ultimately up to Trump, he sees the possibility of taking off the threatened December tariff increases, as China requested, if the trade talks go well.
Kudlow made his comments on Fox Business Network. At the same time, Commerce Secretary Wilbur Ross also told Fox Business that it was more important for the two sides to have a “proper deal” instead of an exact date when it gets signed.
IMF Sees Slower Growth in Asia
The International Monetary Fund released new projections last week that showed growth in Asian economies could be slower than expected. It said growth in Asia could moderate to 5% in 2019, and 5.1% in 2020 – that 0.4% and 0.3% lower than its April projections.
Last week, South Korea reported its economy slowed in the third quarter, growing at 0.4%, according to preliminary estimates by its central bank. The country’s economy has been slowing this year, hit by the U.S.-China trade war. In October, it cut its interest rate for the second time in three months to prop up growth.
This article was originally posted on FX Empire
