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GLOBAL MARKETS-Asian shares ease on geopolitical tensions, oil up 1%

Published 2019-09-23, 02:59 a/m
GLOBAL MARKETS-Asian shares ease on geopolitical tensions, oil up 1%
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Euro Stoxx 50 futures open lower, Asian shares weaker

* Chinese markets fall on jitters about Sino-U.S. trade deal

* Oil gains after sell-off on Friday

* E-Mini futures for S&P 500 up 0.4%

* Risk-sensitive Aussie firms, dollar up on yen

By Swati Pandey

SYDNEY, Sept 23 (Reuters) - Most Asian share markets slipped on Monday as investors waited for more clarity on Sino-U.S. trade talks, while oil gained more than 1% as Middle East tensions remained elevated.

Market sentiment was fragile with civil unrest in Hong Kong, tensions in the Middle East and worries a trade deal between the United States and China could take a long time to materialise. Moves were further exaggerated by low volumes as Japanese markets were shut for a public holiday.

The dour mood was likely to spread elsewhere with pan-region Euro Stoxx 50 futures STXEc1 easing 0.3% in early European trade and Germany's DAX futures FDXc1 off 0.2%. London's FTSE futures FFIc1 were, however, a tad higher.

Chinese shares were in the red, with Shanghai's SSE (LON:SSE) Composite .SSEC stumbling 1.5% while the blue-chip index .CSI300 was down 1.65%.

Hong Kong's Hang Seng index .HSI was 0.8% weaker after a weekend of sometimes violent protests that saw pro-democracy activists vandalise a railway station and shopping mall. Korea's KOSPI .KS11 ended flat after spending most of the day in negative territory following disappointing trade data while Australian and New Zealand shares bucked the trend to finish 0.3% and 0.4% higher, respectively.

That left MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 0.2% at 510.04 points. It is still up more than 3% so far in September.

"There are real concerns about the impact on economies from the trade dispute," said Michael McCarthy, Sydney-based strategist at CMC Markets. "People are probably getting an idea that this will be a long negotiation. And the longer it lingers the more impact it will have economically."

Despite the weakness in Asia, E-mini futures for U.S. S&P 500 ESc1 and the Dow 1YMc1 climbed nearly 0.4% each.

Over the weekend, the U.S. Trade Representative's office issued a brief statement characterising the two days of talks with China as "productive." It added that a principal-level trade meeting in Washington would take place in October, as previously planned. Commerce Ministry, in a brief statement, described the talks as "constructive", and said they had also had a good discussion on "detailed arrangements" for the high-level talks in October.

Additionally, the United States removed tariffs from more than 400 Chinese products in response to requests from U.S. companies. the improved tone, markets still remain unconvinced about the possibility of an imminent deal.

Investors were rattled by news on Friday that Chinese officials unexpectedly cancelled a visit to U.S. farms this week following their two days of negotiations in Washington. Shanghai-based analyst at Tebon Securities said the cancellation had hit investor sentiment and could be a major drag on Chinese A-shares in the near term.

News that five Yemeni civilians were killed in air strikes by the Saudi-led coalition further soured investor appetite. SHOCK

Mideast tensions and worries about oil supplies lifted Brent crude LCOc1 futures 1.26%, or 81 cents, to $65.09 a barrel, while U.S. crude CLc1 futures rose 1.17%, or 68 cents, to $58.77 a barrel. O/R

The Pentagon has ordered additional troops to be deployed in the Gulf region to strengthen Saudi Arabia's air and missile defences following an attack on Saudi oil facilities.

U.S. Secretary of State Mike Pompeo said on Sunday the additional troops are for "deterrence and defence" and Washington aimed to avoid war with Iran.

Markets will closely watch September manufacturing activity surveys due from the United States and European Union later in the day for any signs of a rebound.

Action in currency markets was muted.

The dollar gained 0.15% against the safe haven Japanese yen to 107.71 JPY= after easing 0.5% last week. The risk-sensitive Australian dollar AUD=D3 was up 0.19% at $0.6776.

The euro EUR=D3 and the British pound GBP= were barely changed, leaving the dollar index .DXY mostly flat at 98.471 against a basket of six major currencies.

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Jacqueline Wong)

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