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GLOBAL MARKETS-Asian shares rise, but gains capped by weak sentiment

Published 15/11/2019, 01:58
© Reuters.  GLOBAL MARKETS-Asian shares rise, but gains capped by weak sentiment
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* MSCI Asia ex-Japan +0.34%; Nikkei +0.58%

* Yen weakens, U.S. Treasury yields tick higher

* Trade uncertainty weighs, truce seen unlikely

By Andrew Galbraith

SHANGHAI, Nov 15 (Reuters) - Asian equities rose on Friday

after the S&P 500 index notched a new record closing high, but

investor sentiment remained fragile following weak data from

China and Germany, which reinforced concerns about the global

economy.

Early in the Asian trading day, MSCI's broadest index of

Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.34%.

Japan's Nikkei .N225 added 0.58% and Australian shares .AXJO

gained 0.53%.

The safe-haven yen JPY= weakened, with the dollar rising

0.11% to buy 108.50 yen. The euro EUR= was unchanged at

$1.1021 and the dollar index, which tracks the greenback against

a basket of six major rivals .DXY was flat at 98.163.

Providing a fillip to investor confidence in Asia were

comments from White House economic adviser Larry Kudlow that

Washington was getting close to a trade agreement with China.

Higher U.S. Treasury yields also indicated a slight risk-on

tone in the Asian session, with the 10-year yield US10YT=RR

rising to 1.8307% from a US close of 1.815% on Thursday.

The policy-sensitive two-year yield rose to 1.6036% from

1.593% on Thursday after U.S. Federal Reserve Chair Jerome

Powell said the risk of the U.S. economy facing a dramatic bust

is remote. A Reuters poll of more than 100 economists showed that while

concerns have eased over a U.S. recession, few see an economic

rebound, and most believe a trade truce is unlikely in the

coming year. Global sentiment has been buffeted in recent weeks by

conflicting assessments of progress in talks between the United

States and China aimed at ending their 16-month-long trade war.

On Thursday, China's commerce ministry said that the two

countries are holding "in-depth" discussions on a first phase

trade agreement, and that cancelling tariffs is an important

condition to reaching a deal. China has also ended a nearly five-year ban on imports of

U.S. poultry meat, which the U.S. Trade Representative said

would lead to more than $1 billion in annual shipments to China.

Those developments followed comments from officials from

both countries last week that they had a deal to roll back

tariffs, only to have U.S. President Donald Trump deny that any

such deal had been agreed to. The new record for the S&P, which gained just 0.08% to

3,096.63, came despite a grim outlook from network gear maker

Cisco Systems CSCO.O that underlined the impact of trade

uncertainty.

The company forecast second-quarter revenue and profit below

expectations as increasingly global economic uncertainties kept

clients away from spending more on its routers and switches,

sending its shares down 7.3%. The Dow Jones Industrial Average .DJI fell 0.01% 27,781.96

and the Nasdaq Composite .IXIC dropped 0.04% to 8,479.02.

European shares also fell after data showed the German

economy grew just 0.1% in the third quarter, with consumer

spending helping the country to avoid a mild contraction.

"In further diminishing the likelihood of significant fiscal

stimulus from the Berlin government, it was not good news at

all," analysts at National Australia Bank said in a morning

note.

The German data followed numbers from China indicating a

faster-than-expected slowdown in factory output growth in

October due to weak domestic and global demand. In commodity markets, U.S. crude prices rebounded after

sliding Thursday on rising U.S. crude inventories. U.S. West

Texas Intermediate crude CLc1 was 0.37% higher at $56.98 a

barrel.

Gold retreated from gains prompted by trade uncertainty.

Spot gold XAU= was last trading at $1,466.98 per ounce, down

0.27%. GOL/

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