SHANGHAI (REUTERS) – Asian shares and US stock futures rose on Friday (Oct 11) after US President Donald Trump said he would meet with China’s top trade negotiator, while the pound retreated after rallying on revived hopes of a possible Brexit deal.
Investors’ renewed appetite for riskier assets weighed on the safe-haven yen and US Treasury prices, while oil stayed firm on comments about possible supply cuts from the head of OPEC.
In early Asian trade, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent, following on from gains on Wall Street. S&P e-mini futures added 0.2 per cent.
Australian shares climbed 0.8 per cent, while Japan’s Nikkei stock index gained 0.9 per cent.
Singapore’s Straits Times Index advanced 0.4 per cent, or 13.30 points to 3,102.78 as at 9.01am.
On the Singapore bourse, gainers outnumbered losers 68 to 28, after about 41.9 million shares worth S$38.2 million changed hands.
Among the most heavily traded by volume, Spackman rose 9.1 per cent, or 0.1 cent to 1.2 cents, with 9.3 million shares traded; while Rex International was up 1.3 per cent, or 0.1 cent to 7.8 cents, with 4.6 million shares traded.
On Wednesday, Catalist-listed film producer and investor Spackman Entertainment Group said its new South Korean film Crazy Romance will debut in 22 markets, including Singapore.
Also buttressing the benchmark index were the financials – UOB gained almost 1 per cent, or 25 cents to $25.74, OCBC Bank rose 0.9 per cent, or nine cents to $10.74, and DBS added 0.6 per cent, or 15 cents to $24.86.
Other active index stocks included CapitaLand which climbed 1.1 per cent, or four cents to $3.55, and Venture Corp which gained 0.9 per cent, or 13 cents to $15.30.
CapitaLand on Friday said it has priced a new $500 million fixed rate perpetual issue at 3.65 per cent. Sold on Thursday, orders exceeded $900 million, which allowed the notes to be priced lower than the initial guidance of around 3.85 per cent.
IG market strategist Pan Jingyi noted that the US-China trade fuelled optimism will be the key driver for Asia markets, as investors await the resumption of Friday’s talks.
“Little are expected out of the Asia session that may derail the glow though keeping an eye on any further comments on the talks. The latter half of the day would find Singapore’s August retail sales reading, ahead of Germany’s September inflation reading to watch,” Ms Pan added.
The more bullish market mood came after a first day of trade talks between top US and Chinese negotiators that Trump characterised as “very, very good.”
A White House official said the talks had gone “probably better than expected” and a US Chamber of Commerce official briefed by both sides raised the possibility of a currency agreement this week.
“Freezing tariffs at current levels are unlikely to reverse the current trade driven slowdown in economic growth, and the uncertainty around unresolved structural issues such as IP theft and subsidies to state own enterprises are likely to remain deterrents for a pick-up in much needed capital expenditure,” analysts at National Australia Bank said in a morning note.
“On this score details on a potential currency pact will be important,” they said.
The US dollar rose 0.1 per cent against the yen to 108.07, while the euro was flat at US$1.1004 and the pound was slightly lower, fetching US$1.2432.
The dollar index, which tracks the greenback against a basket of six major rivals, was down at 98.663 after posting
its biggest daily drop in five weeks on waning safe-haven demand for the currency.
The British pound jumped nearly 2 per cent on Thursday, its biggest daily gain since March, after Irish Prime Minister Leo Varadkar said a Brexit deal could be clinched by the end of October after what he called a very positive meeting with his British counterpart, Boris Johnson.
The move away from safe havens also lifted the yield on benchmark 10-year Treasury notes to 1.6716 per cent compared with a US close of 1.656 per cent on Thursday. Yields rose across the curve, with two-year notes yielding 1.5464 per cent compared with a US close of 1.53 per cent.
In commodity markets, oil prices remained higher after the head of Opec said the organisation could take action to balance oil markets, including a deeper cut in oil supplies.
US crude was up 0.43 per cent to US$53.78 a barrel and global benchmark Brent crude was up 0.46 per cent at US$59.37 per barrel.