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Global Markets: Asian stocks up as U.S.-China trade tensions ease, dollar dips

Reuters  |  SYDNEY 

By Swati Pandey

SYDNEY (Reuters) - Asian shares held near one-month highs on Monday on signs the and were toning down their trade war rhetoric, while the dollar dipped again as investors wagered on a slower pace of U.S. interest rate hikes.

MSCI's broadest index of shares outside was up 0.07 percent, on track for a third straight day of gains and within striking distance of one-month high.

Japan's Nikkei tacked on 0.1 percent while South Korea's index climbed 0.3 percent.

Investor sentiment was bolstered after U.S. pledged to help company Corp to "get back into business, fast", that analysts said was "a significant positive."

suspended its main operations earlier this month following a U.S. ban forbidding American companies from supplying to it after the Chinese firm was found to have violated U.S. export restrictions by illegally shipping U.S. goods to

But Trump held out a helping hand on Sunday as he tweeted he and Chinese are working together on a solution for

Separately, U.S. officials are preparing for talks in with China's top to resolve an escalating trade dispute.

"The fact Trump is now...working to find a resolution for ZTE marks the latest sign of thawing in Beijing-relations," said in a note.

"This suggests that Trump might see the chance for real progress on trade talks, and is softening the U.S. position on an issue important to China," it added.

"Trump also needs to remain on side ahead of his meeting with North Korea's Kim and this also suggests that until the 12 June meeting the signalling from the U.S. on trade will be more positive."

North Korean leader Un has scheduled the dismantlement of the country's for next week, ahead of his June 12 meeting with Trump in

The has said it will lift sanctions on if agrees to completely dismantle its nuclear weapons program.

Strong corporate earnings in the current reporting season along with expectations the will hike rates at a slower pace have also bolstered market sentiment in recent sessions.

On Wall Street, the Dow ended Friday 0.4 percent higher. The added 0.2 percent, while the Nasdaq was barely changed.

In Asia, investors will also be eyeing Malaysia's financial markets, which open after a two-day holiday following the stunning victory of in the country's last week.

"We will watch the market and take necessary action whichever way the market goes," Mahathir said on Saturday, after offshore investors expressed concern that his populist promises could undermine economic prospects.

The Malaysian ringgit fell to a four-month low of 3.982 per dollar in early trades. The stock market opens at 0100 GMT.


Last week, the of England held rates steady and NewZealand's central said the official cash rate will remainat historic lows of 1.75 percent for "some time."

That leaves Fed as the only major central in the world committed to rate increases although recent data showing moderate inflation reading has cast doubt over the pace of any hikes.

The dollar was a tad softer at 92.48 against a basket of major currencies and set for its fourth straight day of losses.

Against the Japanese yen, it ticked down to 109.33 per dollar, remaining largely in a holding pattern since late last month.

The euro inched 0.1 percent up to $1.1953 following two consecutive sessions of gains as Italy's anti-establishment parties looked likely to form the next government.

While tensions in the have eased, U.S. plans to reintroduce have stoked anxiety in the

pumps about 4 percent of the world's oil, and the latest development has sent prices near multi-year highs.

On Monday, U.S. crude was flat at $70.7 abarrel and Brent was off 3 cents at $77.08.

The threatened on Sunday to impose sanctions on European companies that do with Iran, as the remaining participants in the Iran nuclear accord stiffened their resolve to keep that agreement operational.

Spot gold was up 0.2 percent at $1,320.06 an ounce, after eking out a small weekly gain last week.

(Editing by Shri Navaratnam)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, May 14 2018. 08:13 IST