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GLOBAL MARKETS-Asia shares hobbled by trade strain, pound up on Brexit talk

Published 11/09/2018, 04:14 pm
Updated 11/09/2018, 04:20 pm
© Reuters.  GLOBAL MARKETS-Asia shares hobbled by trade strain, pound up on Brexit talk
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* Asia shares ex-Japan hit another 14-mth low, Nikkei firms

* Break in tariff hostilities welcome, but seen as temporary

* Sterling holds gains on hopes for a Brexit deal with EU

By Wayne Cole

SYDNEY, Sept 11 (Reuters) - Asian shares were struggling to avoid a ninth straight session of losses on Tuesday as the spectre of a further escalation in the Sino-U.S. trade war haunted investors, while the pound perched at a five-week top on hints a Brexit deal might be nearer.

EMini futures for the S&P 500 ESc1 edged up 0.15 percent, while financial spreadbetters pointed to small opening gains for the major European bourses.

Japan's Nikkei .N225 fared better on the back of a softer yen and rallied 1.3 percent.

Weighing on the yen was news Japanese chipmaker Renesas 6723.T was buying U.S. peer Integrated Device Technology IDTI.O for about $6.7 billion in cash.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.05 percent, but did hold above lows last visited in July last year.

Shanghai blue chips .CSI300 dipped 0.2 percent while South Korea .KS11 fell 0.2 percent as investors awaited the next round of trade hostilities.

Having warned last week that he was ready to levy additional taxes on practically all Chinese imports, U.S. President Donald Trump was uncharacteristically quiet on trade on Monday.

China has cautioned it will respond if the United States takes any new steps on trade. Foreign Minister Chrystia Freeland will meet the U.S. Trade Representative in Washington on Tuesday for another round of talks to renew the NAFTA trade pact. Wall Street, the Nasdaq eked out gains to end four sessions of losses but stocks of insurers slipped as Hurricane Florence barrelled toward the U.S. east coast. Dow .DJI fell 0.23 percent, while the S&P 500 .SPX gained 0.19 percent and the Nasdaq .IXIC 0.27 percent. .N

BETTING ON BREXIT

In currency markets, sterling stood out after the European Union's top negotiator said an agreement for Britain to leave the economic bloc might be reached in the coming weeks.

The pound has been under pressure on anxiety that Britain would exit from the EU without any formal trading arrangement.

Sterling GBP=D3 clambered up to $1.3050, after firming 0.8 percent overnight. euro EUR=EBS inched ahead to $1.1610, but faces resistance at $1.1659. It was aided by an easing in concerns over Italian debt which left the gap between yields on Italian and more creditworthy German bonds at the narrowest in a month.

Against a basket of major currencies the dollar .DXY was 0.1 percent lower at 95.054. It did gain on the yen to 111.44 JPY= , but remained within recent ranges.

Emerging market currencies remained under pressure with a broad index .MIEM00000CUS down near 16-month lows and the Indian rupee INR= near a record trough of 72.675 per dollar,

"Weakness is set to remain a recurring theme amid global trade tensions, a broadly stronger dollar and prospects of higher U.S. interest rates," said Lukman Otunuga, a research analyst at broker FXTM.

"With turmoil in Turkey and Argentina triggering contagion fears, appetite for emerging market assets and currencies is likely to continue diminishing."

In commodity markets, gold was stuck at $1,194.90 an ounce XAU= and continues to move in the opposite direction to the dollar.

Oil prices found support from looming U.S. sanctions against Iran's petroleum industry. O/R

Brent was 25 cents firmer at $77.62 a barrel LCc1 , while U.S. crude inched up 10 cents to $67.64 CLc1 .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI and Nikkei chart

http://reut.rs/2sSBRiD Asian stock markets :

https://tmsnrt.rs/2C2BSt0 Global assets' performance

https://tmsnrt.rs/2BX92de World FX rates in 2018

http://tmsnrt.rs/2egbfVh

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