Hong Kong (AFP) – Asian markets rose on Thursday after Donald Trump signed a spending bill to end a record US government shutdown, while focus was also turning to Federal Reserve interest rates and tech bubble worries. Lawmakers in Washington voted on Wednesday night to send Trump legislation to end the stoppage that closed key services and suspended the release of data crucial to gauging the state of the world’s top economy. The US president put pen to paper later that day, allowing for the reopening of key services that were shut for 43 days as Democrats and Republicans refused to back down.
Investors will now be able to get a long-awaited glimpse of the reports that have been held up by the closure, particularly the Fed as it decides whether or not to cut rates next month, as is widely expected. Even then, the White House said figures on jobs and consumer prices for October were not likely to be released as statistics agencies were unable to collect the necessary data. Still, Stephen Innes at SPI Asset Management wrote: “Reopening also doesn’t mean an instant snap-back to normal for the real economy. When you starve a system of staffing and pay for six weeks, the backlog doesn’t vanish just because a bill passed at 8 pm.”
“The shutdown ends with a vote and a signature; the aftershocks show up in queues, call centres and cash-flow stress far away from the Capitol dome.” Concerns also continue to mount that this year’s AI-led market rally may have pushed valuations too high and led to a bubble in the tech sector that could burst at any time. Some have warned that the hundreds of billions invested in artificial intelligence has been overdone and the return could take time to come through. Observers suggested that the recent tepid performance in several high-flying firms may be a sign of that, with the Nasdaq dropping for two days. The S&P 500 has also struggled of late, although the Dow ended at a record on Wednesday amid speculation that traders are shifting from tech into industrials.
However, Asia continued its healthy run-up this week after a tepid start. Tokyo, Hong Kong, Shanghai, Seoul, Singapore, Mumbai, Manila, Bangkok and Jakarta all rose. But Sydney, Wellington and Taipei fell. London dropped as data showed the UK economy grew less than expected in the third quarter, putting fresh pressure on the government ahead of a closely watched budget this month. Sterling weakened against the dollar following the news. Paris rose and Frankfurt was flat.
Oil prices extended losses after plunging around four percent on Wednesday after OPEC’s monthly crude market report forecast an oversupply in the third quarter. That came just a month after it had predicted a deficit in the period. The commodity has come under pressure of late amid easing tensions in the Middle East and increasing output by OPEC and other key producers. The International Energy Agency has estimated a record surplus in 2026.
Attention is also on Tokyo after Japanese Finance Minister Satsuki Katayama said on Wednesday the government was keeping an eye on currency markets as the yen continued to weaken. She told parliament “the government is watching for any excessive and disorderly moves with a high sense of urgency.” The unit has weakened further to around 155 per dollar since her remarks, prompting speculation that authorities could step in to provide support. It has come under pressure following dovish comments from Japan’s central bank that tempered bets on another interest rate hike and as the United States moved towards reopening its government.
– Key figures at around 0810 GMT –
Tokyo – Nikkei 225: UP 0.4 percent at 51,281.83 (close)
Hong Kong – Hang Seng Index: UP 0.6 percent at 27,073.03 (close)
Shanghai – Composite: UP 0.7 percent at 4,029.50 (close)
London – FTSE 100: DOWN 0.1 percent at 9,897.47
Dollar/yen: UP at 154.85 yen from 154.80 yen on Wednesday
Euro/dollar: UP at $1.1610 from $1.1587
Pound/dollar: UP at $1.3142 from $1.3129
Euro/pound: UP at 88.35 pence from 88.25 pence
West Texas Intermediate: DOWN 0.1 percent at $58.44 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $62.68 per barrel
New York – Dow: UP 0.7 percent at 48,254.82 (close)
© 2024 AFP
