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GLOBAL MARKETS-Asian shares edge up; ECB decision awaited

Published 2019-01-24, 02:08 a/m
Updated 2019-01-24, 02:10 a/m
© Reuters.  GLOBAL MARKETS-Asian shares edge up; ECB decision awaited

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* European stocks seen to open marginally lower

* U.S. political uncertainty, global growth worries continues

* Sterling hits 11-week high

* ECB's policy decision due 1245 GMT

By Tomo Uetake and Daniel Leussink

TOKYO, Jan 24 (Reuters) - Asian shares inched up in subdued trade on Thursday after Wall Street ended higher, but political uncertainty in the United States and worries about weakening global economic growth kept many investors on the sidelines.

Financial spreadbetters expect London's FTSE .FTSE Frankfurt's DAX .DAX and Paris's CAC .FCHI to dip marginally when they open, with investors awaiting news from the European Central Bank's first policy review of the year.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.3 percent, while Japan's Nikkei average .N225 eased 0.1 percent.

"There is no new news to buy, and there are no fresh triggers to sell. Investors are staying on the sidelines," said Yasuo Sakuma, chief investment officer at Libra Investments.

China's benchmark Shanghai Composite .SSEC and the blue-chip CSI 300 .CSI300 climbed 0.5 percent and 0.6 percent, respectively, taking positive cues from financial firms' profits and the approval for a new technology board in Shanghai. Hong Kong's Hang Seng index .HSI rose 0.3 percent.

On Wednesday, Wall Street ended slightly higher after a spate of upbeat earnings reports, including International Business Machines (NYSE:IBM) IBM .N , but lingering concerns about trade tensions and the longest U.S. government shutdown ever limited the advance. .N

White House economic adviser Kevin Hassett said in a CNN interview the U.S. economy could see zero growth in the first three months if the partial government shutdown lasts for the whole quarter. manufacturing growth stalled in January as export orders fell at the fastest pace in 2-1/2 years, a preliminary business survey showed Thursday, offering the latest sign of slower growth hitting a major developed economy. companies warned of weakening demand in China, including South Korea's SK Hynix Inc 000660.KS , the world's second-biggest memory chipmaker, and Hyundai Motor 005380.KS . at Capital Economics warned that China's economic slowdown looks set to be of a similar scale to that in 2015-16, though there are some significant differences so far, most notably less downward pressure on the yuan and no signs of major capital outflows.

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"Against a backdrop of various concerns about other economies, weakness in China adds to reasons to expect a marked global slowdown," they wrote in a note.

"Since China makes up 19 percent of the world economy, the slowdown this year compared to last will knock 0.2 percentage points off global growth."

President Donald Trump said on Wednesday that the United States was doing well in trade talks with China, saying that China "very much wants to make a deal." sources familiar with the talks say the two sides are still far apart on key, structural elements critical for a deal.

"Above all, (investors) are wary there's a possibility that the economic slowdown will go on amid the uncertainty over the U.S.-China trade tension," said Harumi Taguchi, principal economist at IHS Markit.

"In such circumstances, the likelihood is becoming a little bigger that a situation remains where it's hard to buy stocks and the yen is likely to strengthen."

MARKETS AWAIT DIRECTION FROM CENTRAL BANKS

The ECB is widely expected to stay on hold at a policy meeting that ends later on Thursday, but may acknowledge a sharp slowdown in growth, raising the prospect that any further policy normalisation could be delayed. ECB's meeting will come a day after the Bank of Japan cut its inflation forecasts on Wednesday but maintained its massive stimulus programme, with Governor Haruhiko Kuroda warning of growing risks to the economy from trade protectionism and faltering global demand. U.S. Federal Reserve will hold its first policy meeting of 2019 next week, with investors hoping for more clues on how patient it will be before raising interest rates again. Fed officials have left little doubt in recent weeks that they want to stop raising rates - at least for a while.

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In currency markets, the dollar was last off 0.1 percent against the yen JPY= , changing hands at 109.70 yen per dollar. JPY= , also in thin trade.

The greenback hit a year-to-date high of 110.00 yen against the Japanese currency after the BOJ kept its policy on hold the previous day.

Sterling GBP=D4 hit a fresh 11-week high against the dollar, rising to $1.3094, on bets that a no-deal Brexit can be avoided if parliament exerts greater control over the process. euro EUR= was basically flat at $1.1383. It has lost more than 1.5 percent since climbing to a three-month high of $1.1570 on Jan. 10.

The Australian dollar suffered a setback when a hike in mortgage rates by one of the country's major banks added to the case for a cut in official rates, even as domestic job data showed a still solid labour market. Aussie dollar AUD=D3 skidded to $0.7100, unwinding all of a data-inspired jump to $0.7168.

The yield on benchmark 10-year Treasury notes US10YT=RR fell to 2.746 percent, compared with its U.S. close of 2.755 percent on Wednesday.

In commodity markets, oil prices declined on Thursday amid lingering concerns over slowing global economic growth that may limit fuel demand and after a surprise build in U.S. crude inventories. O/R

U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 0.5 percent to $52.38 a barrel, while Brent crude futures LCOc1 were last down 0.4 percent at $60.87.

Gold held steady, supported by a softer dollar. Spot gold XAU= was last traded at $1282.10 per ounce. GOL/

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