Asian markets were mixed Friday as another rally on Wall Street and data indicating a strong US economy were offset by the increasingly tense trade and technology stand-off between China and the United States.
The long-running Brexit saga also moved back into view, with the pound sinking to three-month lows on renewed concerns Britain will leave the EU with no deal as Prime Minister Theresa May tries to push her divorce deal through again.
New York’s three main indexes rose for a third successive day on the back of better-than-expected housing construction data and a dip in US jobless claims, while solid earnings from Walmart and tech firms Cisco Systems and Nvidia reinforced optimism.
The figures provided a much-needed boost to sentiment after almost two weeks of extreme volatility sparked by Donald Trump’s threat, and subsequent implementation, of higher tariffs on Chinese imports.
The move threw a spanner in the works for high-level talks between the superpowers that had seemed to be close to conclusion and led to a retaliation in kind from Beijing, fanning fears of an extended and painful trade war between the economic titans.
The row took a further twist Wednesday when Trump barred Chinese telecoms firms — effectively taking aim at giant Huawei — from the US market and added it to a blacklist restricting US sales to the firm.
China hit out at the move and warned against further harming trade ties.
But in light of the Wall Street rally, OANDA senior market analyst Jeffrey Halley said investors seem “to have temporarily given up trying to predict the fluid situation that is US-China trade relations and concentrate on the here and now”.
“The here and now on Wall Street was strong US housing starts and sparkling results from heavyweights Walmart, Nvidia and Cisco Systems, suggesting yet again that despite the international noise, the US economy is still moving full steam ahead.”