Asian Stocks bit higher ahead of trade talks
Asian stocks on Tuesday were a bit higher ahead of U.S – Sino talks while the pound set to a 28-month low as no deal Brexit concerns were higher.
“Up until now, many market participants had been on the sidelines while the markets factored in the likelihood of the Fed’s rate cut,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities, regarding gains by Asian stocks.
“But with the Fed decision looming close some participants appear to be shaking off the caution and buying.”
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.15%.
South Korea’s KOSPI gained 0.2% and Japan’s Nikkei added 0.7%. Australian stocks climbed as much as 0.7% to touch a record high, supported by buoyant mining shares and adding to the previous day’s tech-driven gains.
In currency markets, the pound was extended an overnight slump and fell to $1.2210, which was the lowest level since March 2017.
Sterling has suffered as investors scrambled to price in the possibility that a last minute agreement for a no-deal Brexit may not be realised by the British Prime Minister Boris Johnson.
The British government said on Monday it assumed there would be a no-deal Brexit because a “stubborn” EU was refusing to renegotiate their departure.
The euro was unchanged at $1.1142 after edging up 0.15% the previous day.
Crude oil prices added to the previous gains, when the stronger-than-expected U.S. GDP strengthened the outlook for oil consumption by the world’s largest economy.
U.S. crude futures were up 0.6% at $57.22 per barrel and Brent crude added 0.5% to $64.03.