Asian markets showed a positive trend on Friday, with investors welcoming signs that US lawmakers may avert a government shutdown. However, ongoing concerns about the escalating trade war, particularly between the US and major trading partners, continued to loom over market sentiment.
The S&P 500 on Wall Street had been hit hard, falling more than 10% from its recent peak, as trade tensions between the US and other global economies weighed heavily on investor confidence. US President Donald Trump’s threats to impose hefty tariffs on European goods, including a proposed 200% tariff on wine, champagne, and other alcoholic beverages, added to the market uncertainty. This followed the EU's planned tariffs on American-made whiskey in response to US duties on steel and aluminum imports.
Despite these concerns, Asian markets saw gains, driven by hopes that the US Congress would pass a bill to prevent a government shutdown. Senate Democratic leader Chuck Schumer had previously threatened to block the Republican spending bill but later dropped his opposition. The package would keep the US government running through September, but Democratic leaders face pressure from grassroots groups who oppose the plan due to proposed spending cuts.
Hong Kong's Hang Seng Index rose more than 1%, recovering some of the week’s losses, although major conglomerate CK Hutchison Holdings suffered a 7% drop following political pressure linked to its sale of a controlling stake in Panama ports. Other markets such as Shanghai, Tokyo, Wellington, and Manila also saw advances, while Singapore, Seoul, Taipei, and Jakarta experienced losses.
Chris Beauchamp, Chief Market Analyst at IG, warned that a US government shutdown could be costly, referencing the 2018-2019 shutdown, which resulted in an $11 billion loss to the US economy. Beauchamp noted that a shutdown, combined with ongoing trade tensions, could worsen market volatility.
In the commodities market, gold hit a record high of $2,990.21 as investors sought safe-haven assets amid ongoing uncertainty. Oil prices were mixed, with West Texas Intermediate (WTI) rising by 0.6% to $66.96 per barrel, while Brent North Sea Crude fell by 0.6% to $70.27 per barrel.
On the currency front, the euro dipped slightly against the dollar, while the pound remained largely unchanged. The dollar strengthened against the yen.
Global developments were also being closely watched, particularly after Russian President Vladimir Putin expressed concerns about the US’s plan for a 30-day ceasefire in Ukraine, though he indicated his willingness to discuss the matter with US President Joe Biden.
Key Figures Around 0230 GMT:
- Tokyo (Nikkei 225): +0.4% at 36,919.12
- Hong Kong (Hang Seng Index):** +1.4% at 23,787.84
- Shanghai (Composite): +1.1% at 3,395.27
- Dow Jones (New York): -1.3% at 40,813.57 (close)
- London FTSE 100: Flat at 8,542.56 (close)
- Oil (West Texas Intermediate): +0.6% at $66.96 per barrel
- Oil (Brent North Sea Crude): -0.6% at $70.27 per barrel
