Asian markets struggle, pound wallows at 20month low

HONG KONG, Asian equities struggled again Tuesday despite a bounce in New York as investors fret over a perfect storm of issues that have hammered global markets, while the pound remained stuck around 20 month lows on Brexit uncertainty.

Bargainbuyers tried to step in after the latest selloff but were unable

to gain traction, with fears about the outlook for the global economy keeping

sentiment beaten down.

The ChinaUS trade row, signs of softness in both countries' economies,

the Huawei arrest, Brexit, demonstrations in France and tanking oil prices

are among the problems facing investors, and analysts warned of more

volatility to come.

Adding to those problems is upheaval in India another crucial economy

where the head of the central Reserve Bank of India has resigned following

a row with Prime Minister Narendra Modi's administration over alleged

government interference.

Monday's development sent the rupee, which was already Asia's worst

performing currency, tumbling more than one percent Tuesday, with speculation

the RBI had intervened to prevent heftier losses. The Mumbai stock market was

down a similar amount.

Global risk sentiment is facing a towering wall of worry as virtually

every major economy in the world is slowing, suggesting the synchronised

global slowdown is accelerating at a much faster pace than thought, said

Stephen Innes, head of AsiaPacific trade at OANDA.

In Asian trade Hong Kong was down 0.1 percent at lunch, Tokyo shed 0.4

percent in the afternoon, Singapore was 0.4 percent off and Seoul was

marginally lower. Bangkok and Jakarta also slipped.

However, Shanghai rose 0.3 percent by the break, Sydney was 0.1 percent

higher and Wellington added 0.2 percent. Manila and Taipei rose.

'Positive signal'

On currency markets the pound was stuck around levels last seen in April

2017, having dived 1.6 percent Monday in reaction to Prime Minister Theresa

May's decision to delay Tuesday's parliamentary vote on her Brexit deal.

May recognised the agreement would be voted down and promised to get

clarity from Brussels on the key issue of Northern Ireland, but the decision

ramped up uncertainty and fuelled fresh questions about her political future.

Adding to the problems, the PM did not provide a timetable for a new vote.

The market is concerned that the postponement uses up valuable time

before the 29th March exit date, and the risk of a nodeal scenario is

growing said National Australia Bank economist David de Garis.

On an upbeat note, Beijing's economics point man Vice Premier Liu He spoke

with US officials to flesh out a timetable for talks to resolve their trade

row, following this month's G20 truce hammered out between Donald Trump and

Xi Jinping.

It's a positive signal that work is in progress, said Michelle Lam, a

greater China economist at Societe Generale.

However, there are low expectations the two sides can reach a fullblown

agreement that will end their trade war, with the waters muddied by the

arrest in Canada of a top executive at Chinese telecoms giant Huawei.

Meng Wanzhou, Huawei's chief financial officer and daughter of the firm's

founder, faces US fraud charges related to allegedly breaking Iran sanctions

but has asked for bail.

The arrest has angered China and led to concerns it could derail the trade


Both main oil contracts inched higher but were well short of making up for

the three percent losses suffered Monday on concerns an output cut agreed by

OPEC at the weekend might not be enough to lift prices and offset a supply


Key figures around 0410 GMT

Tokyo Nikkei 225: DOWN 0.4 percent at 21,125.76

Hong Kong Hang Seng: DOWN 0.1 percent at 25,723.04 (break)

Shanghai Composite: UP 0.3 percent at 2,591.75 (break)

Pound/dollar: UP at $1.2576 from $1.2562 at 2200 GMT

Euro/dollar: UP at $1.1367 from $1.1354

Dollar/yen: DOWN at 113.06 yen from 113.35 yen

Oil West Texas Intermediate UP 14 cents at $51.14 per barrel

Oil Brent Crude: UP 11 cents at $60.08 per barrel

New York Dow Jones: UP 0.1 percent at 24,423.26 (close)

London FTSE 100: DOWN 0.8 percent at 6,721.54 (close)

Source: Bangladesh Sangbad Sangstha (BSS)