Most SE Asian stocks rise on hopes of Sino-US trade war relief

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BENGALURU (Jan 18): Most Southeast Asian stock markets rose on Friday taking cues from broader Asia, with Philippines leading gains, after a media report on progress in US-China trade talks stirred hopes of a deal in their tariff dispute and supported risk sentiment.

US Treasury Secretary Steven Mnuchin had discussed lifting some or all tariffs imposed on Chinese imports and had suggested offering a tariff rollback during trade discussions scheduled for Jan 30, according to a Wall Street Journal report citing people familiar with the internal deliberations.

However, a Treasury spokesperson denied the report saying the process with China is nowhere near completion.

While the news boosted sentiment in the market, analysts are of the opinion that "alleged equity market motivations of the rumour/speculation" might hamper trade agreements.

"If calming financial markets is indeed the main motivation for any conciliatory moves on US-China trade tariffs, it begs the question of durability of any subsequent trade talks' outcome," said Vishnu Varathan, senior economist at Mizuho Bank.

Despite the denial from the Treasury department, global equity markets advanced as investors turned optimistic about softening trade tensions. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.7%.

Industrial and financial stocks drove the Philippine benchmark index 1% higher, leading gains in the region.

Shares of BDO Unibank Inc climbed 1.9%, while those of Ayala Corp advanced 1.6%.    

The Singapore index recovered from the losses of the previous session owing to a fall in the country's December exports, to rise 0.2%.

Financial stocks largely pulled the index higher, with shares of DBS Group Holdings Ltd and United Overseas Bank Ltd rising 0.4% and 0.3%, respectively.

However, the Indonesian index bucked the trend to fall slightly, dragged by consumer staples and financial stocks.

The country's central bank on Thursday held its key rate unchanged and the governor indicated that its cycle of aggressive tightening in 2018 was "near its peak", thanks to "dovish" recent signals from the US Federal Reserve.         

Change on the day

Market                 Current  Previous close  % move
Singapore              3221.21  3214.44         0.21
Bangkok                1582.25  1580.3          0.12
Manila                 8005.73  7927.2          0.99
Jakarta                6421.22  6423.78         -0.04
Kuala Lumpur           1685.8   1682.97         0.17
Ho Chi Minh            901.48   901.89          -0.05

Change so far in 2019

Market                 Current  End 2018        % move
Singapore              3221.21  3068.76         4.97
Bangkok                1582.25  1563.88         1.17
Manila                 8005.73  7,466.02        7.23
Jakarta                6421.22  6,194.50        3.66
Kuala Lumpur           1685.8   1690.58         -0.28
Ho Chi Minh            901.48   892.54          1.00