HONG KONG: Most major Asian markets rose on Tuesday following another positive Wall Street lead, with energy firms up with oil prices as the US prepares to reimpose sanctions on Iran.
A healthy earnings season has provided support to global equities in recent weeks but gains have been limited by ongoing concerns about the simmering trade war between China and the US.
As investors await the next developments in the tariffs spat, they moved in to pick up cheaper stocks, with Hong Kong building on Monday’s gains and Shanghai edging back up the day after hitting a near two-and-a-half-year low.
By the break Tokyo was 0.2 percent higher and Singapore climbed more than one percent while Seoul gained 0.2 percent. However, Sydney dipped 0.3 percent, while Wellington, Taipei and Manila were also lower.
Energy firms were among the winners after a rise in oil prices Monday that came on the back of reports that Saudi Arabia had lowered its oil output.
Also, the US is preparing at 0400 GMT to reimpose stiff sanctions on Iran following Donald Trump’s decision to exit a multi-nation nuclear deal with the major producer.
However, with the move broadly priced in over recent weeks, crude was flat on Tuesday in Asian trade.
But the issue has fuelled geopolitical concerns, with some observers saying the White House is working towards regime change in Tehran.
Iran’s leaders have dismissed Trump’s offer of talks, saying the US was carrying out “psychological warfare”.
“This feels like a movie we’ve all seen before in Afghanistan and Iraq and would appear to go counter to the approach President Trump seemed to have mapped out for the Middle East,” said Greg McKenna, chief market strategist at AxiTrader.
“It’s a dangerous strategy given historical precedents and the entrenched Iranian regime. But, like the trade war with China and almost everything else the administration is pursuing this, too, looks like a negotiating tactic.”
On currency exchanges the pound was stuck around 11-month lows after tumbling in reaction to Britain’s trade secretary Liam Fox warning the odds of leaving the EU without a deal were “60-40”.
That came on top of comments from Bank of England boss Mark Carney, who said the chance of leaving the EU without a deal was “uncomfortably high” and “highly undesirable”.
The euro was also struggling to bounce back from Monday’s losses caused by news that industrial orders in Germany, Europe’s biggest economy, fell more than expected in June.
– Key figures around 0230 GMT –
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Tokyo – Nikkei 225: UP 0.2 percent at 22,562.10 (break)
Hong Kong – Hang Seng: UP 0.3 percent at 27.901.88
Shanghai – Composite: UP 0.1 percent at 2,707.00
Euro/dollar: UP at $1.1563 from $1.1553 at 2100 GMT
Pound/dollar: UP at $1.2946 from $1.2943
Dollar/yen: DOWN at 111.28 yen from 111.39 yen
Oil – West Texas Intermediate: DOWN five cents at $68.95 per barrel
Oil – Brent Crude: UP one cent at $73.76 per barrel
New York – Dow Jones: UP 0.2 percent at 25,502.18 (close)
London – FTSE 100: UP 0.1 percent at 7,663.78 (close)
Source: Brecorder
