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GLOBAL MARKETS-Asian shares retreat from highs, markets take Trump impeachment in stride

Published 19/12/2019, 07:14
© Reuters.  GLOBAL MARKETS-Asian shares retreat from highs, markets take Trump impeachment in stride
US500
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AXJO
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DE30
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UK100
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CL
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EU50
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MIAPJ0000PUS
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CSI300
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Sentiment positive but markets lack momentum

* Pound hurt by renewed worries of a hard Brexit

* Oil eases but downside seen limited on output cuts

By Stanley White

TOKYO, Dec 19 (Reuters) - Asian shares pulled back from a

one-and-a-half year peak on Thursday as investors took some

money off the table ahead of holiday trade and looked to fresh

data on the state of the global economy.

Investors were also watching proceedings in Washington where

the Democrat-led U.S. House of Representatives voted to impeach

Republican U.S. President Donald Trump for abuse of power and

obstruction of Congress.

Market reaction, however, has so far been limited as the

Republican-controlled Senate is widely expected not to vote to

remove Trump from office. MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS briefly touched the highest since June 2018 but

then fell 0.4%.

Australian shares .AXJO erased early gains to trade 0.27%

lower due to declines in the mining sector, while Chinese shares

.CSI300 fell 0.32%.

The pan-region Euro Stoxx 50 futures STXEc1 were down

0.05%, German DAX futures FDXc1 were down 0.12%, but FTSE

futures FFIc1 edged up 0.02%.

The pound nursed heavy losses on concerns Britain could

still crash out of the European Union without a trade deal in

place after a transition period ending in December 2020.

Traders also await a Bank of England (BoE) policy meeting

later Thursday. No change in policy is expected, but the meeting

could pose further downside risks for sterling if more

policymakers swing to the dovish camp and vote for an interest

rate cut.

Overall sentiment was supportive of equities and riskier

assets, but less favourable for safe-haven assets like bonds due

to expectations that economic growth will start to pick up next

year after a tumultuous 2019.

"Data has been generally supportive of an improvement in

economic performance," said Shane Oliver, head of investment

strategy and chief economist at AMP Capital Investors in Sydney.

"Investors can look forward to stronger growth next year,

but a lot of this has already been reflected in share markets."

U.S. stock futures ESc1 edged 0.04% lower on the day. The

S&P 500 .SPX fell 0.04% on Wednesday, weighed by a steep drop

in FedEx Corp FDX.N shares after the U.S. parcel delivery

company cut its fiscal 2020 profit forecast. At one stage in the previous session, the S&P 500 scored its

fifth consecutive record high, and analysts said market

sentiment remained largely upbeat following last week's

announcement of an initial U.S.-China trade agreement.

Other analysts pointed to recent data releases showing

economic improvements in China, the United States and Germany as

reasons to be more optimistic.

In the currency market, sterling GBP=D3 traded at $1.3086,

having tumbled more than 3% from an 18-month high struck on Dec.

13 after UK Prime Minister Boris Johnson's Conservative Party

scored a landslide victory in a general election.

Against the euro, the pound EURGBP=D3 stood at 85.06

pence, close to its weakest since Dec. 4.

Johnson's government on Tuesday ruled out an extension to

the December 2020 deadline for negotiations on a trade deal with

the EU, creating a new Brexit cliff-edge and cutting short

sterling's post-election rally. The focus shifts to the BoE's policy meeting later Thursday.

At its previous meeting, two of the central bank's nine

policymakers voted to cut interest rates.

British inflation remained mired at a three-year low in

November, data showed on Wednesday, and uncertainty surrounding

Brexit remains high, but this is unlikely to shift expectations

that monetary policy will remain on hold. The Australian dollar jumped by 0.36% to $0.6879 after

better-than-expected data on the labour market dented

expectations for interest rate cuts. The yen JPY=EBS held steady at 109.58 per dollar after the

Bank of Japan kept its quantitative easing in place and issued a

gloomier assessment on factory output. Brent crude LCOc1 rose 0.03% to $66.20 per barrel, but

U.S. crude CLc1 dipped 0.03% to $60.91 a barrel after U.S.

government data showed a decline in crude inventories. EIA/S

Prices are likely to be supported due to production cuts

coming from the Organization of the Petroleum Exporting

Countries and its allies, including Russia.

Pound https://tmsnrt.rs/38Qqugc

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(Editing by Sam Holmes & Shri Navaratnam)

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