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GLOBAL MARKETS-Asian shares waver, Hong Kong tensions spoil festive mood after upbeat U.S. data

Published 28/11/2019, 11:58 am
© Reuters.  GLOBAL MARKETS-Asian shares waver, Hong Kong tensions spoil festive mood after upbeat U.S. data
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* Hong Kong law dents optimistic mood

* Australian shares briefly touch record high, then retreat

* Currencies in risk-off mode

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook

SINGAPORE, Nov 28 (Reuters) - Asian share markets wobbled on Thursday as concerns that tensions over Hong Kong could stymie a U.S.-China trade deal cast a pall over Thanksgiving cheer from unexpectedly positive U.S. economic data.

U.S. President Donald Trump on Wednesday signed into law congressional legislation backing pro-democracy protesters in Hong Kong despite angry objections from Beijing. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was little changed in early trade, while Japan's Nikkei .N225 flitted in and out of positive territory.

Australia's S&P/ASX 200 .AXJO touched a record intraday high in early trade, and was up 0.3%.

"In the short term you can't fight the positive momentum," said Michael McCarthy, chief markets strategist at brokerage CMC Markets in Sydney.

He said that fallout from the Hong Kong legislation could yet unstuck U.S-China trade talks, but that markets were still priced for a deal.

"If it's not delivered, there'll be real concern."

The next round of U.S. tariffs on Chinese goods is due to take effect on Dec. 15.

Wall Street indexes hit fresh record highs overnight, buoyed by trade deal hopes and data showing U.S. economic growth picked up slightly in the third quarter, rather than slowing as first reported. Dow Jones Industrial Average .DJI rose 0.15%, the S&P 500 .SPX gained 0.42% and the Nasdaq .IXIC added 0.66%. U.S. markets are closed for Thanksgiving on Thursday. .N

Other data showed the number of Americans filing claims for jobless benefits fell. There are signs the downturn in business investment may be drawing to a close and the U.S. Federal Reserve said the outlook was bright. the US economy may be turning down, to the point where the Fed might have to resume policy easing next year, have been somewhat assuaged," said Ray Attrill, head of FX strategy at National Australia Bank. "So relief all round."

HONG KONG JITTERS

Currency markets were more circumspect.

The dollar and trade-exposed currencies were spurned and safe-havens such as the Japanese yen sought after Trump signed the Hong Kong bills into law.

The law is viewed as supportive for anti-government protesters in the city, since it threatens sanctions for human rights violations and seeks to safeguard Hong Kong's autonomy.

But it has been denounced by China as gross interference in its domestic affairs.

"It's displeasing to the Chinese side," said Westpac FX analyst Imre Speizer. "And we are getting close to the point when this deal needs to get signed...the market's reacting to it as though it might put a snag in the works."

The yen JPY= rose 0.2% to 109.37 yen per dollar, while riskier currencies such as the Australian dollar AUD= fell by the same margin to $0.6763.

The British pound GDP= bobbed higher after a model for pollsters YouGov, which accurately predicted the 2017 election, said Prime Minister Boris Johnson was on course to win a fat majority in parliament at the Dec. 12 election. was slightly higher. Spot gold XAU= was traded at $1456.9929 per ounce. GOL/

U.S. crude CLc1 dipped 0.15% to $58.02 a barrel. Brent crude LCOc1 fell to $64.13 per barrel.

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