Most Asean markets gain on optimism over trade deal, China rate cut

  • Markets
  • Tuesday, 05 Nov 2019

SINGAPORE: Most Southeast Asian stock markets rose on Tuesday on signs that Washington and Beijing were nearing a trade truce, while fresh stimulus measures in China, the region's largest trading partner, also supported buying.

Global equities got a boost after the Financial Times reported that the United States is considering dropping existing tariffs on Chinese goods as a concession to seal a partial deal, which according to U.S. officials, could be signed this month.

"The most significant change on the trade front compared with just three months ago is that both sides, which were very negative on the deal, now want to get something signed," said Joel Ng, analyst, KGI Securities.

Gestures such as removal of tariffs show the "attitude of the two countries, that they are keen on getting the deal signed", which is helping push up equity markets, he added.

Meanwhile, China's central bank cut the interest rate on its medium-term lending facility (MLF) for the first time since early 2016, in a bid to shore up liquidity amid slowing economic growth.

Services sector activity in China expanded at a slower pace in October. In Southeast Asia, the Philippine bourse advanced to its highest in over three months, after data showed the country's annual inflation rose 0.8% in October from last year, remaining within the central bank's forecast range for the month.

Financials and consumer firms lifted the index, with Bank of the Philippine Islands and SM Investments Corp adding up to 2.6% and 4.3%, respectively.

Indonesian shares rebounded after three straight sessions of losses, with Bank Mandiri (Persero) and poultry feed producer Charoen Pokphand Indonesia gaining 2.2% and 1.8%, respectively.

Sentiment got a lift after data showed on Tuesday that the country's economy grew 5.02% in the third quarter compared with last year, roughly in line with market expectations. An index of Jakarta's 45 most liquid stocks traded up to 1.2% higher.

Singapore equities rose on the back of financials and industrial sectors, with DBS Group Holdings and Jardine Strategic Holdings advancing up to 1% and 1.8%, respectively.

Malaysia's benchmark index traded in negative territory ahead of a central bank meeting, in which the Bank Negara Malaysia is expected to keep its benchmark interest rate unchanged, according to a Reuters poll.

Thai stocks hit their highest in near two weeks, with Advanced Info Service PCL and Kasikornbank PCL gaining 0.9% and 1.4%, respectively. - Reuters

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