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GLOBAL MARKETS-Asian shares rise on conciliatory trade tone but mood cautious

Published 2019-08-29, 08:45 p/m
GLOBAL MARKETS-Asian shares rise on conciliatory trade tone but mood cautious
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* MSCI ex-Japan up 0.4%, Nikkei jumps 1%

* U.S., China to have face-to-face trade talk in Sept

* Analysts remained cautious about prospect of trade deal

* Currencies muted; gold, silver off recent highs

By Swati Pandey

SYDNEY, Aug 30 (Reuters) - Asian shares ticked higher on Friday as China struck a hopeful tone on trade with the United States but continued fears about a global growth slowdown, or even a recession, capped sharp rallies.

Investors were focused on a string of economic releases due over the weekend including China's official manufacturing survey which would provide a good gauge of the real impact from the Sino-U.S. trade war.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.4% but stayed near a recent 7-1/2 month trough. For the week, it is set for a small weekly loss.

Japan's Nikkei .N225 jumped 1% while South Korea's KOSPI index .KS11 gained 1.3% and Australian shares .AXJO rose 0.7%.

Overnight, Wall Street added more than 1% after China's commerce ministry said Beijing and Washington were discussing the next round of face-to-face talks scheduled for September. comments spurred hopes for progress in the talks and boosted the Chinese yuan, which snapped a 10-day losing streak.

Stock analysts were more circumspect though.

"It's really hard to say the U.S.-China trade backdrop changed dramatically in the last 12 hours – the Sept 1 tariffs are still going into effect and there are further hikes on the calendar," JPMorgan (NYSE:JPM) analysts wrote to clients in a note.

U.S. President Donald Trump said some discussions were taking place on Thursday, with more talks scheduled.

China's commerce ministry also said a September round of meetings was being discussed by the two sides, but added it was important for Washington to cancel a tariff increase.

"In reality, the headlines are extremely innocuous and don't differ from what China has said in the past but they crossed during a dead zone of liquidity and attendance and as a result are having an outsized influence on trading," JPMorgan said.

Trade tensions have dominated market sentiment for much of this year with wild swings in world stocks as rhetoric between the United States and China fluctuates from conciliatory to combative.

Last week, China unveiled tit-for-tat tariffs on $75 billion of U.S. goods. In response, U.S. President Donald Trump said he would tack an additional 5% duty onto $550 billion of Chinese goods.

The volatile nature of the negotiations have kept many analysts cautious.

"The recent escalation of the tariff war provides no hopes of a near-term trade deal," ING's Asia economist Prakash Sakpal wrote.

"As such, we are in for a long stretch of slow growth and increasingly challenging policy environment, as some central bankers have warned."

Even so, U.S. Treasury yields rose overnight with the benchmark 10-year Treasury US10YT=RR climbing to 1.535% from a three-year low of 1.443% touched earlier this week.

Among currencies, the dollar .DXY was a tad weaker at 98.422 against a basket of six major currencies. It was unmoved against the Japanese yen at 106.49 after gains overnight while the euro EUR= was flat too at $1.1053.

Sterling GBP= held at $1.218 ahead of a crucial few days for parliament next week which could even result in a no-confidence motion and a new election.

In commodities, spot gold XAU= came off recent highs to trade at $1,523.4 an ounce. Silver also to $18.23 an ounce after hitting its highest level in more than two years. crude CLc1 slipped 16 cents, or 0.3%, to $56.55 a barrel.

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

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes)

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