Morning Report

  • Asian stocks trade in mixed territory after volatile session on Wall Street*
  • Stocks in Australia were lower in the morning, while Japan saw gains in early trade.
  • Overnight on Wall Street, markets saw broad declines despite a renewal of trade talks between the U.S. and China.
  • U.S. crude prices partially recovered in the morning of Asian trade, after oil prices fell more than 7 percent on Tuesday to extend their losing streak to 12 straight sessions.

Stocks in Asia were trading in mixed territory in the morning after a turbulent trading session overnight on Wall Street.

Japan’s Nikkei 225 saw gains of 0.51 percent in early trading action while the Topix index rose 0.45 percent. South Korea’s Kospi was lower by about 0.3 percent.

In Australia, the ASX 200 slipped 0.37 percent in morning trade. The energy subindex declined by more than 2.1 percent on the back of yesterday’s drop in oil prices and the heavily-weighted financial subindex was lower by 0.3 percent.

The mainland China markets, which are being closely watched by investors because of the ongoing trade war between Washington and Beijing, are set to open at 9:30 a.m. HK/SIN.

New data for China’s industrial production for the month of October is set to be released at 10:00 a.m. HK/SIN.

*Renewed US-China trade talks*

Overnight on Wall Street, the Dow Jones Industrial Average shed 100.69 points to close at 25,286.49 while the S&P 500slipped 0.15 percent to 2,722.18 by the closing bell — its fourth straight decline. The Nasdaq Composite closed largely flat at 7,200.87.

The major indexes had earlier hit their session highs after White House economic advisor Larry Kudlow confirmed reports of renewed talksbetween the U.S. and China on trade.

The Wall Street Journal first reported Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He had resumed trade talks. The report comes ahead of a meeting between President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Buenos Aires, Argentina.

*US crude prices see partial recovery*

In the oil markets, the U.S. crude futurescontract saw a slight gain at $55.73 per barrel during the morning of Asian trade.

Oil prices fell more than 7 percent Tuesday to extend their losing streak to 12 straight sessions. Oil’s decline on Tuesday came after Trump said he hoped OPEC would not cut oil production in order to lift prices.

“Oil prices have dropped sharply since peaking in early October as oversupply concerns have deepened,” Vivek Dhar, a mining and energy commodities analyst at Commonwealth Bank of Australia, said in a morning note.

Saudi Arabia’s Energy Minister Khalid al-Falih had said on Monday that OPEC agreed there was a need to cut oil supplynext year by around 1 million barrels per day from October levels.

Commenting on the Saudi move, Dhar said it “demonstrates the kingdom’s willingness to change strategy and lead from the front to address oversupply concerns.”

Dhar, however, warned that “any output cut by Saudi Arabia will require participation from other allied nations. And that could be an uphill battle.”

Oil stocks saw a broad decline Down Under in morning trade , with Santosslipping more than 3.6 percent, Woodside Petroleum declining 2.82 percent and Beach Energy dropping 5.44 percent.

The fall in shares of oil companies was also mostly seen in Japan, with Inpexfalling 3.33 percent, JXTG shedding 2.83 percent and Japan Petroleum Exploration dropping 4.34 percent. Fuji Oil, on the other hand, bucked the trend to see gains of 1.28 percent.

*Currencies*

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.303 after seeing highs above 97.6 yesterday.

The Japanese yen, which is widely seen as a safe-haven currency, was at 113.91 against the dollar after touching lows above 114 in the previous session. The Australian dollar traded at $0.7235 after rising from around the $0.717 handle yesterday.

*PBOC set the yuan reference rate at 6.9402*

The People’s Bank of China (PBOC) set the yuan reference rate at 6.9402 vs the previous day’s fix of 6.9629.

Published by prashanti forex

Prashanti Forex is managed by a certified treasury professional with an experience of more than 15 years in Finance and Advisory Business. His expertise come from various organisations, where he has gained knowledge and deep understanding of financial environment. His Principle Objective is providing customised advise with excellent service, committing a relationship based on integrity, understanding, honesty and trust. We are glad to offer you a boutique of services which will enable your organisation to enhance the profitability and efficiently manage the business risks. Our Services are : Treasury & Risk Management Solutions Trade Finance Wealth Management

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