Asian stocks struggle while oil stabilises

16 June, 2019 12:00 AM printer

HONG KONG: Most Asian markets fell Friday on geopolitical concerns, uncertainty over the China-US trade row and the outlook for the global economy, while oil prices were flat after the previous day’s surge fuelled by attacks on two tankers in the crucial Gulf of Oman.

Hong Kong was again on the back foot, losing 0.7 percent, after the city was rocked this week by violent protests against government plans for a law that would allow extraditions to China and which observers warn could erode its attraction to businesses, reports AFP.

Trading floors have been the scene of unease for weeks since Donald Trump’s shock decision to hit China with higher tariffs despite expectations the two sides were close to a deal to end their long-running stand-off.

Shanghai tumbled one percent, Singapore shed 0.2 percent and Seoul lost 0.4 percent while Taipei was off 0.3 percent. Mumbai, Bangkok, Manila and Jakarta also fell, though Tokyo ended 0.4 percent higher and Sydney gained 0.2 percent.

In early European trade London dipped 0.2 percent, Paris eased 0.3 percent and Frankfurt fell 0.4 percent.

The uneasiness over the past week has seen the price of gold hit a 15-month high of around $1,360 per ounce as traders look for safer assets to hide from the uncertainty on world markets.

Eyes are now on the G20 summit in Japan later this month where the president and his Chinese counterpart are expected to meet to discuss the issue, though Washington has been playing down the chances of a deal being struck.

However, support has come from bets that the Federal Reserve will cut interest rates soon as the economy stutters and the trade war rumbles along.

“What’s important to remember right now is that there aren’t a whole lot of upside catalysts,” Randy Frederick, vice president for trading and derivatives at Charles Schwab & Co, told Bloomberg TV.

“Markets are waiting now for what the Fed is going to say at the meeting, and that’s coming next week.”

Adding to the downbeat mood are concerns about tensions in the Middle East after US Secretary of State Mike Pompeo accused Iran of responsibility for the Gulf tankers attack and said they would be raised at a UN Security Council meeting later Thursday.

Tehran denies the accusation and labelled the attacks in the world’s most important crude shipping lane as “suspicious”.