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Global Markets: Asian shares extend rebound on hopes for trade deal, cautious Fed

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - Asian shares rose for the third straight session on Tuesday as investors bet that and are inching towards a trade deal and that would halt its tightening if economic growth slows further.

Japan's Nikkei rose 1.0 percent while MSCI's broadest index of shares outside ticked up 0.1 percent.

On Wall Street, the S&P 500 gained 0.7 percent on Monday following 3.4 percent surge on Friday, with and leading the rally.

Gains in tech names allayed some fears, sparked by Apple's sales warnings last week, that the high-flying sector is starting to be hurt by the Sino-U.S. trade war.

U.S. predicted on Monday that and could reach a trade deal that "we can live with" as dozens of officials from the world's two largest economies resumed talks in a bid to end their trade dispute.

said had the "good faith" to work with the to resolve trade frictions, but many analysts doubt the two sides can reach a comprehensive agreement on all of the divisive issues before a March deadline.

Investor also continued to buy battered stocks in response to strong U.S. job data on Friday and comments by Fed that he was aware of the risks and would be patient and flexible in policy decisions this year.

Powell's comments have eased market concerns that might ignore signs of an economic slowdown and stick to its script of two rate hikes this year.

"Various concerns markets had earlier are receding for now. Still, there's no denying that U.S. earning momentum is slowing," said Hirokazu Kabeya, at

"Ultimately we need to see whether upcoming earnings reports can dispel market concerns."

The U.S. dollar is losing momentum as investors wind back expectations of rate hikes and a future widening in its yield advantage. But conditions in most other developed economies aren't much to write home about, either, potentially limiting the upside for other major currencies.

The euro traded at $1.1474, near Wednesday's two-month high of $1.1497.

British and European officials are discussing the possibility of extending Britain's formal notice to withdraw from the amid fears a Brexit deal will not be approved by March 29, reported, citing unidentified sources.

Emerging market currencies benefited even more, with MSCI emerging market currency index rising 0.9 percent in the last two days to levels last seen in late July.

The safe-haven yen has erased almost all of its sharp losses made in a crash fall last week and last stood at 108.68 to the dollar.

The 10-year U.S. Treasuries yield bounced back to 2.698 percent, from Friday's low of 2.543 percent, a trough last seen almost a year ago. Still, that is more than 50 basis points below its October peak of 3.261 percent.

also rebounded further from 1-1/2-year lows reached in December, drawing support from a report that is planning to cut crude exports to around 7.1 million barrels per day (bpd) by the end of January.

OPEC and its allies are trying to rein in a surge in global supply, driven mostly by the United States, where production surpassed 11 million bpd in 2018. has pushed up U.S. inventories.

U.S. Intermediate (WTI) crude futures

rose 0.5 percent to $48.76 a barrel.

(Editing by Kim Coghill)

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

First Published: Tue, January 08 2019. 08:10 IST
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