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Asia | Asia Markets Closing Report on Friday 13, , December 2019.

'Christmas has come early': Japan and Hong Kong soar more than 2.5% amid trade optimism

Eustance Huang


Shares in Asia jumped on Friday following news that Washington and Beijing have agreed to a phase one trade deal in principle.
Hong Kong’s Hang Seng index led gains among major markets regionally, soaring 2.57% to close at 27,687.76, as shares of Tencent and HSBC jumped 3.44% and 2.99%, respectively.
Japanese stocks surged on the day. The Nikkei 225 gained 2.55% to 24,023.10 as shares of index heavyweight Fast Retailing soared 4.39%. The Topix index added 1.59% to end its trading day at 1,739.98.
Meanwhile, the Bank of Japan’s “tankan” survey released Friday showing business confidence among the country’s large manufacturers diving to its lowest level in more than six years.
Mainland Chinese stocks rose on the day, with the Shanghai composite gaining 1.78% to around 2,967.68 and the Shenzhen component up 1.71% to 10,004.62. The Shenzhen composite also advanced 1.48% to about 1,660.55.
South Korea’s Kospi also saw robust gains as it closed 1.54% higher at 2,170.25, with shares of chipmaker SK Hynix skyrocketing 5.4%.
Shares in Australia also advanced, as the S&P/ASX 200 gained 0.46% to close at 6,739.70, with shares of major miner BHP jumping 1.94%.
Overall, the MSCI Asia ex-Japan index jumped 1.61% higher.
“From the markets point of view, it does seem like Christmas has come early,” Daniel Morris, senior investment strategist at BNP Paribas Asset Management, told CNBC’s “Squawk Box” on Friday.
“If you compare this sentiment at this point last year, you know, just really a 180 degrees with concerns about a U.S. recession and so on,” Morris said.
“From that point of view, a contrarian point of view, when everyone was so pessimistic and it turned out to be a great year for risk assets, for equities. I agree, it should make anyone a little bit cautious now that everything, so to speak, seems to be going right,” he said.
TICKERCOMPANYNAMEPRICECHANGE %CHANGE 
NIKKEINikkei 225 IndexNIKKEI24023.10598.292.55
HSIHang Seng IndexHSI27687.76693.622.57
ASX 200S&P/ASX 200ASX 2006739.7030.900.46
SHANGHAIShanghaiSHANGHAI2967.6851.981.78
KOSPIKOSPI IndexKOSPI2170.2532.901.54
CNBC 100CNBC 100 ASIA IDXCNBC 1008615.36157.491.86
The moves came amid U.S.-China trade optimism. The White House has offered to scrap the next round of tariffs on Chinese exports to the U.S. that are set to take effect on Sunday, sources told CNBC on Thursday. Washington has also proposed slashing existing duties on $360 billion in Chinese products by 50%.
“It is important to realize that there still hasn’t been any official announcements but between (U.S. President Donald) Trump’s tweets and reports by the media, there’s more reason to believe that minimally, tariffs will be delayed,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in an note on Thursday.
As we’ve learned the hard way, (Trump’s) attitude and decisions can change last minute so until he makes an official announcement which must occur before December 15th, the tariffs could still be imposed,” Lien warned.
Movements in the British pound were also watched on Friday, with the British currency advancing 1.88% to $1.3409 after U.K. Prime Minister Boris Johnson’s Conservative Party reportedly secured a commanding majority following Thursday’s general election.
Overnight stateside, stocks on Wall Street rose amid the trade optimism. The S&P 500 gained 0.9% to see a record close of 3,168.57. The Nasdaq Composite also finished at an all-time closing high, adding 0.7% to 8,717.32. The Dow Jones Industrial Average closed 220.75 points higher at 28,132.05.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.832 after seeing highs above 97.2 yesterday.
The Japanese yen, often seen as a safe-haven currency in times of market uncertainty, traded at 109.64 against the dollar after weakening sharply from levels below 108.6 yesterday. The Australian dollar changed hands at $0.6922 after rising from levels below $0.688 in the previous session.
Oil prices rose in the afternoon of Asian trading hours, with the international benchmark Brent crude futures contract up 0.78% to $64.70 per barrel. U.S. crude futures also added 0.61% to $59.54 per barrel.

— This report was updated to reflect the correct trading price of the British pound.

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                                                On Thursday 12, December 2019

Asia stocks mixed as Fed signals no rate hikes in 2020

Eustance Huang


Stocks in Asia were mixed on Thursday after the U.S. Federal Reserve signaled overnight that it would not raise interest rates in 2020.
The Nikkei 225 in Japan gained 0.14% to close at 23,424.81 while the Topix index finished its trading day at 1,712.83. South Korea’s Kospi closed 1.51% higher at 2,137.35, as shares of industry heavyweight Samsung Electronics and SK Hynix surged more than 2.5% each.
Hong Kong’s Hang Seng index jumped 1.35%, as of its final hour of trading, with shares of Chinese tech juggernaut Tencent surging 3.06%. Life insurer AIA also saw its stock gain 2.31%.
Shares in mainland China were lower on the day. The Shanghai composite shed 0.3% to about 2,915.70 while the Shenzhen component fell 0.17% to 9,836.23. The Shenzhen composite declined 0.193% to approximately 1,636.33.
Meanwhile, shares in Australia declined on the day, with the S&P/ASX 200 slipping 0.65% to 6,708.80.
Overall, the MSCI Asia ex-Japan index was 0.96% higher.
The moves regionally came as the Fed left interest rates unchanged on Wednesday, a decision that was largely anticipated — capping a year where the U.S. central bank cut its benchmark rate three times. The Fed also indicated it does not expect any policy changes through at least 2020.
Stocks stateside closed fractionally higher overnight following the Fed’s decision on interest rates. The Dow Jones Industrial Average rose 29.58 points to 27,911.30. The S&P 500 added 0.3% to 3,141.63 while the Nasdaq Composite gained 0.4% to 8,654.05.
Meanwhile, developments on U.S.-China trade continued to be monitored ahead of Sunday, when additional tariffs on Chinese exports to the U.S. are set to kick in.
“It seems like the baseline is for an extension but not a deal, and certainly not a tariff rollback,” Alex Wolf, head of Asia investment strategy at J.P. Morgan Private Bank, told CNBC’s “Squawk Box” on Thursday.
“It seems like the market is taking a fairly benign view of that deadline, of course there are worries but my guess would be that ... there’s more of an assumption that those will be extended, that those will not be put in place than there are that they will be,” Wolf said.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.096 after touching highs above 97.5 yesterday.
The Japanese yen traded at 108.61 against the dollar after touching an earlier high of 108.44. The Australian dollar was at $0.6882 after rising from levels below $0.681 in the previous session.
Oil prices rose in the afternoon of Asian trading hours. The international benchmark Brent crude futures contract added 0.44% to $64.00 per barrel while U.S. crude futures gained 0.2% to $58.88 per barrel.

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                                  On Wednesday 11, December 2019

Stocks in Asia mixed ahead of Fed interest rate decision

Eustance Huang


Major markets in Asia were mixed on Wednesday ahead of the U.S. Federal Reserve’s interest rate decision due later in the day stateside.
Mainland Chinese stocks ended their trading day mixed, with the Shanghai composite up 0.24% to around 2,924.42. The Shenzhen component, on the other hand, shed 0.64% to 9,852.71. The Shenzhen composite also fell 0.445% to approximately 1,639.50. Hong Kong’s Hang Seng index rose about 0.8%, as of its final hour of trading.
In Japan, the Nikkei 225 slipped fractionally to close at 23,391.86 while the Topix index declined 0.34% to end its trading day at 1,714.95. South Korea’s Kospi closed 0.36% higher at 2,105.62.
Meanwhile, Australia’s S&P/ASX 200 rose 0.68% to finish its trading day at 6,752.60.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.51%.
TICKERCOMPANYNAMEPRICECHANGE %CHANGE 
NIKKEINikkei 225 IndexNIKKEI23391.86-18.33-0.08
HSIHang Seng IndexHSI26645.43208.81 0.79
ASX 200S&P/ASX 200ASX 2006752.6045.70 0.68
SHANGHAIShanghaiSHANGHAI2924.427.10 0.24
KOSPIKOSPI IndexKOSPI2105.627.62 0.36
CNBC 100CNBC 100 ASIA IDXCNBC 1008364.1824.48 0.29
Investors awaited the Fed’s final interest rate decision for the year with expectations that the central bank will keep the rate on hold.
“We expect the (Federal Open Market Committee) to leave the Funds rate unchanged,” Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, wrote in a note.
“The FOMC is confident that current policy settings are at an appropriate level to lift US inflation back towards target,” Capurso said. “We doubt there has been any material reassessment of this view since the October meeting.”
Meanwhile, developments on U.S.-China trade will be watched as Sunday inches closer, when more tariffs on Chinese exports to the U.S. are set to kick in. That comes as markets have been expecting a “phase one” trade deal to be reached between Washington and Beijing.
The Wall Street Journal reported Tuesday that the U.S. plans to delay slapping China with additional tariffs as both sides try to work out the agreement.
U.S. negotiators have also asked Chinese officials to commit to some agricultural purchases upfront before moving forward with a deal, the report added. Meanwhile, China wants its agricultural purchases to be proportional with the amount of tariffs the U.S. rolls back. The U.S. is also reportedly pushing for a quarterly review of the promised purchases.
Still, White House economic advisor Larry Kudlow said Tuesday following the Journal report that the Dec. 15 tariffs are still “on the table.”
“We think a lot of the good news ... is reflected in the price,” Eric Robertson, global head of foreign exchange, rates and credit research at Standard Chartered Bank, told CNBC’s “Squawk Box” on Wednesday. “In other words, markets now assume or anticipate that some form of a phase one deal will be signed.”
“Even if it doesn’t happen by the 15th, I think what you might see is something along the lines of: ‘We’re still negotiating, we’re in the final stretch, we’re waiting to put pen to paper, tariffs will go into place on the 15th but we won’t collect any revenue on them for the next six months,’” Robertson said.
Stocks on Wall Street dipped overnight, with the Dow Jones Industrial Average closing 27.88 points lower at 27,881.72. The S&P 500 shed 0.1% to end at 3,132.52 while the Nasdaq Composite dipped 0.1% as well to close at 8,616.18.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.534 after seeing an earlier low of 97.483.
The Japanese yen traded at 108.72 per dollar after weakening from levels below 108.6 yesterday. The Australian dollar was at $0.6817 after touching levels around $0.683 in the previous session.
Oil prices declined in the afternoon of Asian trading hours as international benchmark Brent crude futures slipped 0.62% to $63.94 per barrel. U.S. crude futures also shed 0.54% to $58.92 per barrel.


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                                     On Tuesday 10, December 2019

Asia stocks mixed as China consumer inflation jumps in November

Eustance Huang


Major Asian markets were mixed on Tuesday as Chinese inflation data showed a surge in consumer prices in November.
Mainland Chinese stocks recovered from an earlier slip to finish their trading day higher, with the Shanghai composite fractionally higher at about 2,917.32 as shares of China Postal Savings Bank rose 2% in their Shanghai debut. The Shenzhen component added 0.4% to 9,915.87 while the Shenzhen composite also gained 0.384% to around 1,646.82. Hong Kong’s Hang Seng index closed 0.22% lower at 26,436.62.
Chinese consumer inflation jumped in November, according to data released by the country’s National Bureau of Statistics on Tuesday.
The Consumer Price Index for November jumped 4.5% year-on-year, as food prices skyrocketed 19.1% amid an outbreak of African swine fever.
On the other hand, producer prices in China declined in the same month, with the Producer Price Index (PPI) for November falling 1.4% year-on-year.
Commenting on the PPI decline, Pearl Bridge Partners’ Andrew Sullivan said: “The problem that they have certainly ... is the fact that this is very much, you know, a sign of global demand rather than just the demand within China itself.”
“So much of it now really comes down to, you know, the trade dispute and the effect that that’s having on global supply and demand,” Sullivan, a director at the firm, told CNBC’s “Street Signs” on Tuesday.
“There’s only a limited amount that really China can do in the short-term with regard to this,” he added, with the market’s “main focus” likely remaining around the prospect of a trade deal between Beijing and Washington.
Elsewhere, Japan’s Nikkei 225 declined slightly to close at 23,410.19 while the Topix index dipped fractionally to end its trading day at 1,720.77. Shares of game maker Nintendo surged 2.86% as the firm officially launched its Switch console in China. South Korea’s Kospi rose 0.45% to close at 2,098.00.
Meanwhile, shares in Australia declined, with the S&P/ASX 200 closing 0.34% lower at 6,706.90.
Overall, the MSCI Asia ex-Japan traded 0.17% lower.
TICKERCOMPANYNAMEPRICECHANGE %CHANGE 
NIKKEINikkei 225 IndexNIKKEI23410.19-20.51-0.09
HSIHang Seng IndexHSI26436.62-58.11-0.22
ASX 200S&P/ASX 200ASX 2006706.90-23.10-0.34
SHANGHAIShanghaiSHANGHAI2917.322.840.10
KOSPIKOSPI IndexKOSPI2098.009.350.45
CNBC 100CNBC 100 ASIA IDXCNBC 1008334.97-10.79-0.13
Meanwhile, on the U.S.-China trade front, Bloomberg reported Tuesday that U.S. Agriculture Secretary Sonny Perdue said Washington is unlikely to impose upcoming tariffs on Chinese exports, set to go into effect on Dec. 15.
“We have a deadline coming up on the Dec. 15 for another tranche of tariffs, I do not believe those will be implemented and I think we may see some backing away,” Perdue said, according to Bloomberg.
Investors have been watching for more concrete details on an anticipated “phase one” deal between the two economic powerhouses ahead of Dec. 15. The trade war between the U.S. and China has now raged on for more than a year with duties slapped on billions of dollars worth of each other’s goods.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.618 after seeing an earlier low of 97.589.
The Japanese yen traded at 108.61 per dollar after strengthening from levels above 109.6 last week. The Australian dollar changed hands at $0.6828 after seeing an earlier low of $0.6816.
Oil prices slipped in the afternoon of Asian trading hours, with international benchmark Brent crude futures shedding 0.19% to $64.13 per barrel. U.S. crude futures also declined 0.2% to $58.90 per barrel.,

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                                     On Monday 9, December 2019

Asia stocks inch higher as China's exports decline in November

Eustance Huang


Asia stocks edged higher on Monday as China’s exports declined in November for the fourth consecutive month, according to the country’s customs data.
Mainland Chinese stocks closed little changed, with the Shanghai composite fractionally higher at around 2,914.48, the Shenzhen component at 9,876.27 while the Shenzhen composite was at about 1,640.51.
Hong Kong’s Hang Seng index was 0.14% higher, as of its final hour of trading, with protests in the city crossing a 6-month milestone. Demonstrators have been locked in a stalemate with the city’s embattled local government since early June.
China’s overseas shipments dropped 1.1% year-on-year in November, below the 1.0% expansion expected by analysts in a Reuters poll. Imports, on the other hand, rose 0.3% as compared to a year earlier — exceeding projections for a 1.8% decline.
The latest print on Chinese trade comes as Beijing remains embroiled in a trade war with Washington. Both parties aim to reach a “phase one” trade deal that has remained elusive ahead of a closely-watched date of Dec. 15, when additional tariffs on Chinese exports to the U.S. are set to kick in.
The continued decline in exports from China means that Beijing has “very good incentive to come to some agreement,” Steve Cochrane, chief Asia Pacific economist at Moody’s Analytics, told CNBC’s “Squawk Box” on Monday. “That ... might be a positive factor.”
Still, Cochrane remained uncertain on the possible timeline for the two economic powerhouses to strike a deal: “I think there’s probably as much of a chance that we go into next year before we get an agreement, as we get one next week.”
TICKERCOMPANYNAMEPRICECHANGE %CHANGE 
NIKKEINikkei 225 IndexNIKKEI23430.7076.300.33
HSIHang Seng IndexHSI26494.73-3.64-0.01
ASX 200S&P/ASX 200ASX 2006730.0023.000.34
SHANGHAIShanghaiSHANGHAI2914.482.460.08
KOSPIKOSPI IndexKOSPI2088.656.800.33
CNBC 100CNBC 100 ASIA IDXCNBC 1008354.5232.230.39
Elsewhere, the Nikkei 225 in Japan closed 0.33% higher at 23,430.70 as shares of index heavyweight and conglomerate Softbank Group gained more than 1% while the Topix index ended its trading day 0.51% higher at 1,722.07.
Japan’s economy grew at an annualized rate of 1.8% in the July to September quarter, according to revised data from the country’s Cabinet Office on Monday. That was sharply higher than the initial estimate of a 0.2% expansion.
Still, one economist voiced caution over growth figures for the fourth quarter.
“We had some very weak consumption figures for October which is … not much of a surprise after the sales tax hike, but the figures were probably … on the weaker end of what we had been anticipating,” Marcel Thieliant, senior economist at Capital Economics, told CNBC’s “Street Signs” on Monday.
Exacerbated by the fact that industrial production “fell very sharply in October,” Thieliant said: “Clearly, (the fourth quarter) will be very weak. We have penciled in a 1% contraction in output.”
South Korea’s Kospi also added 0.33% to close at 2,088.65. Shares in Australia also gained, with the S&P/ASX 200 up by 0.34% to end its trading day at 6,730.00.

Overall, the MSCI Asia ex-Japan index traded 0.3% higher.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.644 after falling from levels above 98.1 last week.
The Japanese yen traded at 108.59 per dollar after strengthening from lows beyond 109.6 in the previous week. The Australian dollar changed hands at $0.6833 after rising from levels below $0.678 last week.
Oil prices dipped in the afternoon of Asian trading hours, with international benchmark Brent crude futures shedding 0.23% to $64.24 per barrel. U.S. crude futures also fell 0.42% to $58.95 per barrel.
Correction: This report was updated to reflect that protests in the city of Hong Kong crossed a 6-month milestone.


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                                    On Friday 6, December 2019

Asia stocks rise ahead of US payrolls data

Eustance Huang


Stocks in Asia rose on Friday ahead of U.S. nonfarm payrolls data for November expected to be released later in the day stateside.
Mainland Chinese stocks were higher on the day, with the Shenzhen component adding 0.81% to 9,878.62 and the Shenzhen composite also advancing 0.821% to about 1,640.33. The Shanghai composite rose 0.43% to around 2,912.01.
Hong Kong’s Hang Seng index rose 1.07% to close at 26,498.37, with shares of Chinese tech juggernauts Alibaba and Tencent jumping 2.65% and 1.7%, respectively.
The Nikkei 225 in Japan rose 0.23% to close at 23,354.40, while the Topix index ended its trading day 0.11% higher at 1,713.36. Data released Friday showed October household expenditure in Japan dropping 5.1% year-on-year in real terms, following a sales tax hike that took place in that month.
In South Korea, the Kospi added 1.02% to close at 2,081.85 as shares of industry heavyweight Samsung Electronics and chipmaker SK Hynix jumped 1.82% and 2.28%, respectively.
Meanwhile, shares in Australia edged higher on the day, as the S&P/ASX 200 rose 0.36% to 6,707.00.
Overall, the MSCI Asia ex-Japan index was 0.56% higher.
TICKERCOMPANYNAMEPRICECHANGE %CHANGE 
NIKKEINikkei 225 IndexNIKKEI23354.4054.310.23
HSIHang Seng IndexHSI26498.37281.331.07
ASX 200S&P/ASX 200ASX 2006707.0024.000.36
SHANGHAIShanghaiSHANGHAI2912.0112.550.43
KOSPIKOSPI IndexKOSPI2081.8521.111.02
CNBC 100CNBC 100 ASIA IDXCNBC 1008312.8740.060.48
Overnight stateside, stocks ended the session on Wall Street little changed. The Dow Jones Industrial Average gained just 28.01 points to 27,677.79 while the S&P 500 added 0.16% to 3,117.43. The Nasdaq Composite gained less than 0.1% to 8,570.70.
Investors awaited the release of the U.S. government’s monthly nonfarm payrolls report expected on Friday stateside. That would come following a disappointing private payrolls number released Wednesday, and also on the back of the Labor Department saying Thursday that U.S. weekly jobless claims dropped 203,000 last week — the lowest in seven months.
“With the (U.S. Federal Reserve) pretty much having exhausted its ‘insurance cuts’ and markets almost unanimously expecting the Fed to be on a purposeful pause, it is safe to say that U.S. nonfarm payroll will be relegated to the backseat,” Vishnu Varathan, head of economics and strategy at Mizuho Bank wrote in a note.
Instead the obsession will be with tariff rollback!” Varathan said. “Specifically, whether or not White House trade negotiators will relent to offer China tariff rollback, which appears to have been established as Beijing’s precondition to strike a phase-one trade deal.”
Reuters reported Friday that China’s finance ministry said the country will waive import tariffs for certain soybean and pork shipments from the U.S., without providing further detail.
Markets have seen a rocky start to December amid conflicting headlines on the U.S.-China trade front ahead of a closely watched date of Dec. 15 when additional tariffs on Chinese exports to the U.S. go into effect.
The Wall Street Journal reported Thursday that Washington and Beijing are still in disagreement over the size of China’s agriculture purchases. Meanwhile, China has given little indication on how negotiations with the U.S. are progressing. Earlier in the week, markets were sent into a frenzy after U.S. President Donald Trump said he may delay a trade deal with China till after the 2020 U.S. presidential election.
“I think the markets are taking consolation that at least this is not escalating and trade talks have not broken down, talks are still going on and there’s still hope,” Vasu Menon, executive director of investment strategy at Singapore’s OCBC Bank told CNBC’s “Street Signs” on Friday.
Still, Menon acknowledged that “clearly there are disagreements” between the two economic powerhouses, be it the U.S. demands for China to purchase more U.S. agricultural products or Beijing’s desire to see Washington roll back tariffs.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.374 after slipping from levels above 98.0 earlier in the trading week.
The Japanese yen traded at 108.64 per dollar after strengthening from levels above 108.8 yesterday. The Australian dollar changed hands at $0.6842 after rising from levels below $0.678 earlier in the week.
Oil prices were largely unchanged in the afternoon of Asian trading hours, with international benchmark Brent crude futures hovering around the flatline at $63.40 per barrel. U.S. crude futures was largely flat at $58.42 per barrel.

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                                  On Thursday 5, December 2019

Asia stocks mostly higher amid trade confusion

Eustance Huang


Stocks in Asia were mostly higher on Thursday as investors digested recent developments on U.S.-China trade.
In Japan, the Nikkei 225 gained 0.71% to close at 23,300.09 as shares of index heavyweight and robot maker Fanuc jumped 1.98%. The Topix index added 0.48% to end its trading day 1,711.41.
Mainland Chinese stocks gained on the day, with the Shanghai composite up 0.74% to about 2,899.47 and the Shenzhen component rising 1.15% to 9,799.07. The Shenzhen composite added 1.147% to approximately 1,626.97. Hong Kong’s Hang Seng index gained 0.56%, as of its final hour of trading.
Meanwhile, shares in Australia also advanced after leading losses among regional markets on Wednesday, with the S&P/ASX 200 closing 1.16% higher at 6,683.00.
Data from the Australian Bureau of Statistics released Thursday showed retail sales in the country were largely flat from the previous month on a seasonally adjusted basis. That was below expectations for a 0.3% increase from a Reuters poll.
South Korea’s Kospi, on the other hand, lagged as it slipped 0.39% to close at 2,060.74.
India’s Nifty 50 was largely flat, recovering from a slip seen earlier after the Reserve Bank of India unexpectedly kept interest rates unchanged. Markets had been widely anticipating a sixth rate cut from the Indian central bank amid a notable slowdown in the country’s economy.
Overall, the MSCI Asia ex-Japan index traded 0.57% higher.

US-China trade confusion

Investor reacted to overnight developments on U.S.-China trade, after a news report from Bloomberg said Washington and Beijing were edging closer to a trade deal.
The Bloomberg report, which cited people familiar with the talks, said the two countries were moving closer to agreeing on the amount of tariffs that would be rolled back in a so-called phase-one trade deal. U.S. President Donald Trump also said Wednesday that trade talks with China were going well.
That came just a day after Trump said Tuesday he may delay a trade deal with China till after the 2020 U.S. presidential election, leading to a sell-off across markets globally. The recent developments come ahead of a closely watched date of Dec. 15, when additional tariffs on Chinese exports to the U.S. are set to go into effect.
″(Trump) likes to keep everybody off balance,” William Reinsch, senior adviser and Scholl chair in international business at CSIS, told CNBC’s “Squawk Box” on Thursday.
“We’re headed into a deadline. He has to make a decision about more tariffs by December 15th, so I think he wants to do things that will ... keep the Chinese off balance, keep them confused, and keep the pressure on,” Reinsch said.
“The tariffs are crucial, it’s one of our key risks that we see in the market,” Adrian Zuercher, head of Asia-Pacific asset allocation at UBS Global Wealth Management, told CNBC’s “Street Signs” on Thursday. “We see a relatively good chance that there’s a sort of first phase deal and maybe the December tariffs get pushed out or actually even removed.”
Overnight stateside, the major indexes rebounded from a 3-day losing streak following the Bloomberg report. The Dow Jones Industrial Average closed 146.97 points higher at 27,649.78 while the S&P 500 gained 0.6% to end its trading day at 3,112.76. The Nasdaq Composite advanced 0.5% to close at 8,566.67.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.562 after seeing highs above 97.7 yesterday.
The Japanese yen traded at 108.81 against the dollar after weakening from levels below 108.5 yesterday. The Australian dollar changed hands at $0.684 after bouncing from lows around $0.681 in the previous session.
Oil prices dipped in the afternoon of Asian trading hours, with international benchmark Brent crude futures 0.11% lower at $62.93 per barrel. U.S. crude futures declined 0.26% to $58.28 per barrel.

— CNBC’s Fred Imbert contributed to this report.


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                                     On Wednesday 4, 2019

Asia stocks fall as Trump says trade deal with China may be delayed

Eustance Huang



Stocks in Asia mostly slipped on Wednesday after U.S. President Donald Trump said overnight that he may delay a trade deal with China till after the 2020 U.S. presidential election.
Shares in Australia led losses among the region's major markets, with the S&P/ASX 200 declining more 1.58% to close at 6,606.50 as shares of major miner BHP plunged 2.49%.
The Australian economy grew 1.7% on a seasonally adjusted basis year-on-year in the September quarter, data from the Australian Bureau of Statistics showed on Wednesday.
"The economy has continued to grow, however the rate of growth remains well below the long run average," Bruce Hockman, chief economist for the ABS, said in a statement.
In Japan, the Nikkei 225 fell 1.05% to close at 23,135.23 as shares of index heavyweight Fast Retailing plummeted 5.21%. The Topix index also declined 0.2% to end its trading day at 1,703.27.
Mainland Chinese stocks were mixed on the day, with the Shanghai composite down 0.23% to about 2,878.12 while the Shenzhen component was up 0.31% to 9,687.95. The Shenzhen composite also rose 0.199% to approximately 1,608.52. Hong Kong's Hang Seng index declined 1.16%, as of its final hour of trading.
South Korea's Kospi ended its trading day 0.73% lower at 2,068.89, as shares of chipmaker SK Hynix fell 1.27% — following overnight declines of NvidiaMicron and Advanced Micro Devices on Wall Street.
Overall, the MSCI Asia ex-Japan index traded 0.84% lower.
Investors have been anticipating a "phase one" trade deal between Washington and Beijing to be inked, ahead of a closely watched date of Dec. 15, when additional tariffs on Chinese exports to the U.S. are set to kick in.
But Trump told reporters on Tuesday: "In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right." When asked if he had a deadline for the deal, he added: "I have no deadline, no."
"Hopefully it's just negotiating tactics and posturing in the run up to the December 15th deadline and we'll see some sort of resolution well ahead of ... the 12 month timeline," James Thom, investment director of Asian equities at Aberdeen Standard Investments, told CNBC's "Squawk Box" on Wednesday.
Even if tariffs do increase come Dec. 15, Thom said: "Who knows how long that will last, there's always the scope to roll that back."
Markets need to learn from experience that there is little to gain from reacting too sharply to Trump's trade related comments in the run-up to a deal.
Seema Shah
Chief Strategist, Principal Global Investors
Principal Global Investors' Seema Shah dubbed Trump's latest comments as a "ploy to regain the upper hand in these negotiations."
"Just like muscle memory, markets need to learn from experience that there is little to gain from reacting too sharply to Trump's trade related comments in the run-up to a deal," Shah, who is chief strategist at Principal Global Investors, said in a note. "In the past 18 months he has clearly demonstrated that this 'to and fro' is his preferred form of negotiation."
Fox News reported that the White House still plans on moving ahead with scheduled Dec. 15 tariffs on Chinese goods notwithstanding recent efforts at a "phase one" trade truce.
Overnight stateside, stocks tumbled amid the trade uncertainty. The Dow Jones Industrial Average fell 280.23 points to close at 27,502.81 while the S&P 500 slipped 0.7% to end its trading day at 3,093.20. The Nasdaq Composite closed about 0.6% at 8,520.64.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.765 after falling from levels above 97.9 seen earlier.
The Japanese yen traded at 108.50 against the dollar after strengthening from lows around 109.2 yesterday. The Australian dollar changed hands at $0.6823 after slipping from an earlier high of $0.6853.
Oil prices were up in the afternoon of Asian trading hours, with international benchmark Brent crude futures adding 0.72% to $61.26 per barrel. U.S. crude futures also gained 0.66% to $56.47 per barrel.

— CNBC's Thomas Franck contributed to this report.

Correction: This report was updated to reflect that data from the Australian Bureau of Statistics on Wednesday showed the country's economy grew 1.7% on a seasonally adjusted basis year-on-year in the September quarter.                               

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                                      On Tuesday 3, December 2019    

Australia drops more than 2%, leading losses among Asia markets

Eustance Huang


Stocks in Asia mostly fell on Tuesday following negative trade developments overnight as U.S. President Donald Trump said that he will reinstate tariffs on U.S. steel and aluminum imports from Brazil and Argentina.
Shares in Australia led losses regionally, with the S&P/ASX 200 dropping 2.19% to close at 6,712.30.
The Reserve Bank of Australia said Tuesday it was keeping its main cash rate at a record low of 0.75%, a move that was in line with expectations from most analysts in a Reuters poll. The Australian central bank has slashed rates three times since June this year.
“The easing of monetary policy this year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range,” said RBA Governor Philip Lowe in a statement.
The Australian dollar changed hands at $0.6844 following the RBA’s announcement on its interest rate decision, after seeing a low of $0.6812 earlier.
Hong Kong’s Hang Seng index declined 0.17%, as of its final hour of trading, with shares of retailers such as Sa Sa and L’Occitane falling. Data on Monday showed total retail sales volume for October in the Hong Kong dropped 26.2% year-on-year — its worst decline on record, according to a Reuters report. The embattled city has been rocked by months of anti-government protests.
The Nikkei 225 in Japan closed 0.64% lower at 23,379.81 while the Topix index shed 0.45% to end its trading day at 1,706.73. South Korea’s Kospi slipped 0.38% to close at 2,084.07 as shares of chipmaker SK Hynix dropped 2.24%.
Mainland Chinese shares bucked the overall trend regionally as they recovered from earlier losses to see gains on the day. The Shanghai composite added 0.31% to around 2,884.70 while the Shenzhen component rose 0.55% to 9,657.65. The Shenzhen composite gained 0.547% to about 1,605.33.
Overall, the MSCI Asia ex-Japan index traded 0.41% lower.
TICKER COMPANY NAME PRICE CHANGE %CHANGE
NIKKEINikkei 225 IndexNIKKEI23379.81-149.69-0.64
HSIHang Seng IndexHSI26391.30-53.42-0.20
ASX 200S&P/ASX 200ASX 2006712.30-150.00-2.19
SHANGHAIShanghaiSHANGHAI2884.708.890.31
KOSPIKOSPI IndexKOSPI2084.07-7.85-0.38
CNBC 100CNBC 100 ASIA IDXCNBC 1008273.77-12.46-0.15

Trade fears

New trade tensions arose as U.S. President Donald Trump said he will restore tariffs on Brazil and Argentina metal imports.
Trump said in a tweet on Monday: “Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries.”
“Unfortunately it’s all to do with the election next year,” Colin Graham, chief investment officer of multi-asset solutions at Eastspring Investments, told CNBC’s “Squawk Box” on Tuesday. “This is about ... gaining the votes and so he can secure a second term ... as president.”
The U.S. Trade Representative said Monday that it could slap tariffs of up to 100% on certain French products, adding to global trade tensions.
Uncertainty also remained on the U.S.-China trade front. Trump said Monday China still wants to make a deal on trade, “but we’ll see what happens.”
His comments came following a heating up of tensions between the two economic powerhouses last week after Trump signed two pieces of legislation supporting protesters in Hong Kong, with a spokesman for the Chinese foreign ministry saying Friday that Beijing will take ”“strong counter-measures” against Washington.
“We expect that a narrow deal around trade can be achieved, and this would be one where no new tariffs or those planned but not implemented are postponed,” Kerry Craig, global market strategist at J.P. Morgan Asset Management, wrote in a note. “While there is a clear economic incentive from both sides to do some sort of deal, the political desire to reach more than the minimum is weak, as the two side are still going to want to compete in areas such as technology,”
“With an outcome that is not clear, investors are better to focus on company fundamentals and Chinese domestic names which can be backed by structural shifts in the economy,” Craig said.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.89 after declining from highs above 98.3 yesterday.
The Japanese yen, often seen as a safe-haven currency in times of market uncertainty, traded at 109.13 per dollar after strengthening sharply from levels above 109.5 yesterday.
Oil prices rose in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 0.3% to $61.10 per barrel. U.S. crude futures also advanced 0.46% to $56.22 per barrel.

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                                      Monday  2, December 2019

Asia stocks gain as Chinese manufacturing data exceeds expectations

Eustance Huang


Stocks in major Asian markets saw gains on the first trading day of December as Chinese factory activity sprung a positive surprise in November.
Japanese stocks led gains among major markets in the region, with the Nikkei 225 adding 1.01% to 23,529.50, as shares of index heavyweight Fast Retailing gained 1.66%. The Topix index also rose 0.89% to close at 1,714.49.
Mainland Chinese stocks rose on the day, with the Shanghai composite gaining 0.13% to around 2,875.81 and the Shenzhen component adding 0.24% to 9,605.19. The Shenzhen composite advanced 0.219% to approximately 1,596.60. Hong Kong's Hang Seng index also rose 0.41%, as of its final hour of trading.
South Korea's Kospi closed 0.19% higher at 2,091.92. Shares in Australia also edged higher as the S&P/ASX 200 gained 0.24% to end its trading day at 6,862.30.
Overall, the MSCI Asia ex-Japan index traded 0.23% higher.

China's manufacturing data surprise

A private survey of Chinese factory activity in November came in stronger than expected on Monday, with the Caixin/Markit manufacturing Purchasing Managers' Index for the month rising to 51.8. That was higher than expectations of a 51.4 reading by economists in a Reuters poll. The October PMI reading came in at 51.7.
The 50-point mark separates growth and contraction in PMI readings.
Data released over the weekend showed the official Purchasing Managers' Index (PMI) was at 50.2 in November, according to China's National Bureau of Statistics. That was beyond expectations of a November reading of 49.5 by analysts in a Reuters poll. The official PMI reading had come in at 49.3 in October.
"The move back into expansionary mode in China's official manufacturing PMI is good news ... (but) also somewhat tempered by the facts China's industrial sector is still besieged by deflationary risks and rising borrowing costs while the domestic consumer remains constraint by higher food prices," Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a note.

US-China trade watch

Uncertainty continued to cloud the outlook for U.S.-China trade negotiations and protests in Hong Kong.
Axios reported Sunday, citing a source, that the anticipated deal is now "stalled because of Hong Kong legislation" and a "phase one" agreement between Washington and Beijing would only happen "year-end at the earliest." The report also said Trump is expected to pause on planned tariffs in December.
Chinese state media said Sunday that Beijing wants a rollback of tariffs in the phase one trade deal that the two economic powerhouses are aiming to reach.
Meanwhile, civil unrest continued to rock Hong Kong as the city saw fresh protests over the weekend.
U.S.-China tensions heightened last week after Trump signed two pieces of legislation supporting protesters in Hong Kong, prompting China's foreign ministry to claim Washington has "sinister intentions" after the bills were signed into law. A spokesman for the Chinese foreign ministry added Friday the country will take "strong counter-measures" against the U.S.
The situation in Hong Kong has raised concerns of strains in trade negotiations between Washington and Beijing ahead of Dec. 15, when new tariffs on Chinese exports to the U.S. are set to kick in.
Ray Farris, chief investment officer for South Asia at Credit Suisse, told CNBC's "Squawk Box" on Monday: "We tend to think there'll be a deal by the end of the year. The key part of that deal will be that the U.S. plan to increase tariffs on Dec. 15 probably will be shelved."
"I think maybe there could be a (tariff) rollback on say the September tariff increase and any deal is likely to include some sort of schedule for tariff reduction going into the future, conditional on the terms of the deal being met," he added.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.316 after spiking to levels above 98.4 late last week.
The Japanese yen traded at 109.62 against the dollar after weakening from levels below 108.9 last week. The Australian dollar changed hands at $0.6775 after declining from levels above $0.678 in the previous trading week.
Oil prices rose in the afternoon of Asian trading hours. International benchmark Brent crude futures added 1.17% to $61.20 per barrel. U.S. crude futures gained 1.47% to $55.98 per barrel.

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                                   Friday 28, November 2019

Hong Kong stocks lead losses among major Asia markets as 

tensions remain

Eustance Huang


Stocks in Asia were lower on Friday as investors continued to watch for developments on U.S.-China trade following a recent escalation in tensions over Hong Kong.
Hong Kong’s Hang Seng index led losses among major markets regionally as it fell 2.03% to close at 26,346.49, with shares of life insurer AIA dropping 2.24%.
Mainland Chinese stocks slipped on the day, with the Shanghai composite down 0.61% to around 2,871.98 and the Shenzhen composite declining 0.297% to about 1,593.10. The Shenzhen component also shed 0.42% to 9,582.16.
Elsewhere, Japan’s Nikkei 225 slipped 0.49% to close at 23,293.91 while the Topix index shed 0.51% to end its trading day at 1,699.36.
South Korea’s Kospi dropped 1.45% to close at 2,087.96 as shares of automaker Hyundai Motor fell 2.42%. The Bank of Korea announced on Friday its decision to keep the benchmark interest rate steady at 1.25%, in line with expectations of economists in a Reuters poll.
Meanwhile, the S&P/ASX 200 in Australia declined 0.26% to end its trading day at 6,846.00.
Overall, the MSCI Asia ex-Japan index was 1.15% lower.
TICKERCOMPANYNAMEPRICECHANGE %CHANGE 
NIKKEINikkei 225 IndexNIKKEI23293.91-115.23-0.49
HSIHang Seng IndexHSI26346.49-547.24-2.03
ASX 200S&P/ASX 200ASX 2006846.00-18.00-0.26
SHANGHAIShanghaiSHANGHAI2871.98-17.71-0.61
KOSPIKOSPI IndexKOSPI2087.96-30.64-1.45
CNBC 100CNBC 100 ASIA IDXCNBC 1008253.03-97.84-1.17
Following the signing of bills by U.S. President Donald Trump in support of Hong Kong protesters on Wednesday, investors continue to assess the potential impact on ongoing trade negotiations between Washington and Beijing. China strongly condemned the actions of the U.S., with the country’s Ministry of Foreign Affairs saying Thursday that Washington had “sinister intentions.”
Hong Kong has been rocked by months of civil unrest initially sparked by a since-withdrawn extradition bill.
That comes as an anticipated “phase one” trade deal between the U.S. and China remains elusive ahead of Dec. 15, when additional tariffs on Chinese exports to the U.S. are set to go into effect.
“We’re still concerned (about) what is the impact of this Hong Kong bill ... on the trade front,” Suan Teck Kin, head of research at United Overseas Bank, told CNBC’s “Squawk Box” on Friday.
“For Chinese investors and Hong Kong people, we are very cautious,” Jackson Wong, asset management director at Amber Hill Capital, told CNBC’s “Street Signs” on Friday. “We are waiting ... to see whether both countries ... will do any further actions.”
The Japanese yen, often seen as a safe-haven currency in times of market uncertainty, changed hands at 109.49 against the dollar after seeing an earlier low of 109.59.
“A larger decline in USD/JPY is a material risk once we get a formal reaction by the Chinese authorities to the US Hong Kong Bill,” Kim Mundy, a currency strategist at Commonwealth Bank of Australia, wrote in a note.
“US-China trade developments and movements in US Treasury yields will remain the key drivers of JPY direction, with Japanese economic developments a secondary driver,” Mundy said.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.33 after earlier touching a low of 98.305.
The Australian dollar was at $0.6772 after seeing an earlier low of $0.6761.
Oil prices declined in the afternoon of Asian trading hours, with international benchmark Brent crude futures slipping 0.2% to $63.74 per barrel. U.S. crude futures were marginally lower at $58.09 per barrel.

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