Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Asian Equities Edge Higher After Powell Testimony; Japan, EU Sign Trade Agreement

Published 18/07/2018, 12:07 pm
Updated 18/07/2018, 12:34 pm
© Reuters.  Asian equities traded slightly higher in morning trade

© Reuters. Asian equities traded slightly higher in morning trade

Investing.com – Asian equities traded slightly higher in morning trade on Wednesday following upbeat remarks from Federal Reserve Chairman Jerome Powell during his congressional testimony.

Overnight, The Dow rose 55.53 points to 25,119.89, with Johnson & Johnson (NYSE:JNJ) outperforming after the company reported better-than-expected earnings and revenues. The S&P 500 gained 0.4% to close at 2,809.55, led by gains in tech and consumer staples, while the Nasdaq hit a record high as Netflix (NASDAQ:NFLX) and tech stocks rebounded.

“The ability of Netflix to bounce off its opening lows, and Amazon (NASDAQ:AMZN) to do the same, has given investor’s confidence that the big momentum stocks are not suddenly going to fall out of bed,” said Matt Maley, equity strategist at Miller Tabak + Co. “The other thing is Chairman Powell did not say anything that was overly hawkish in his opening statement."

Powell presented a positive assessment of the U.S. economy during his semi-annual congressional testimony on Tuesday, and said the central bank is on track to gradually raise interest rate.

He also noted that protectionism could potentially hinder economic growth.

“In general, countries that have remained open to trade, that haven’t erected barriers including tariffs, have grown faster. They’ve had higher incomes, higher productivity,” he said.

The Fed chairman also said trade concerns “may well” have an impact on wages and capital expenditures. “We don’t see it in the numbers yet, but we’ve heard a rising chorus of concern which now begins to speak of actual capex plans being put on ice for the time being,” he said.

In Asia, China’s Shanghai Composite edged up 0.2%, while the Shenzhen Component slipped 0.1%. Hong Kong’s Hang Seng Index also rose 0.2%.

Markets now shift their focus to how the government would react to mitigate the effects of the recent trade dispute with the U.S., after data released Monday showed that output in the second quarter slowed and factory activity cooled more than expected.

Elsewhere, Japan and the European Union signed a trade agreement on Tuesday that would allow more movement of goods and services between the two economies as they seek countermeasures against U.S.’s protectionism. The Economic Partnership Agreement would help Japanese car exports and making it easier for European farmers to sell their produce in the Asian nation. The Nikkei 225 gained 1.0% following the news.

Elsewhere, South Korea’s KOSPI added 0.3%. Index heavyweight Samsung Electronics (KS:005930) rose 2.3% and SK Hynix jumped 2.1%.

Down under, Australia’s S&P/ASX 200 rose 0.8%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.