US stock index futures ticked higher Friday as the US House of Representatives passed legislation in an effort to end a government shutdown and China-related reports supported investor sentiment.
SandP 500 Index futures contracts expiring March rose as much as 0.9 per cent after the underlying gauge slumped 2.5 per cent as a measure of US manufacturing plunged the most in a decade and Apple cut its profit forecast.
Futures contracts on the Dow Jones Industrial Average and Nasdaq 100 gained as much as 0.8 per cent and 1.1 per cent respectively.
"The market's mistaken Apple problems with the global economy's problems," said Ken Peng, a Hong Kong-based investment strategist at Citigroup. "When cooler minds come in, you should see some respite."
After a choppy start, futures contracts rose as the US House passed a bill to fund eight of nine government departments that have been shuttered for almost three weeks amid a protracted battle between US president Donald Trump and Democrats over funding for a border wall.
It's also ahead of the December non-farm payrolls report and Federal Reserve chair Jerome Powell speaking in Atlanta.
The news added to already positive sentiment in Asia after the Caixin China December services and composite Purchasing Managers’ Indexes were more expansionary than expected and Beijing confirmed vice-minister level trade talks with the US will begin Monday.
Hong Kong’s Hang Seng Index climbed as much as 1.6 per cent and Shanghai’s benchmark added as much as 2 per cent.
China stocks bounced back from a more than four-year low on Friday, closing the week higher, as the government said it would cut banks’ reserve requirement ratios and as optimism about trade talks with the United States helped sooth investor nerves.
The blue-chip CSI300 index rose 2.4 per cent to 3,035.87, while the Shanghai Composite Index closed up 2.0 per cent at 2,514.87. The benchmark Shanghai index briefly touched a more than four-year low just as the market opened.
Elsewhere, Japanese stocks fell as global growth concerns dominated the first trading day of 2019, and investors are in no rush to get back.
The Topix index dropped 1.5 per cent, with a group of electronics makers weighing the most, while the blue-chip Nikkei 225 Stock Average slid 2.3 per cent.
Both gauges briefly fell by more than 3 per cent in early trading, as Japan resumed trading after a four-day New Year’s holiday.
The yen weakened slightly versus the dollar after gaining 2.4 per cent during the previous four sessions.
Still, the partial US government shutdown is likely to push toward its third week after Mr Trump remained steadfast in his demands for $5 billion for a wall or barrier in a surprise news conference flanked by members of a border patrol labour union.
The White House in a statement threatened to veto any spending bill that would reopen the government and deny funds to the president as it can’t accept legislation that funds wasteful programs while ignoring “urgent border security needs.”
The SandP 500 Index’s biggest drop since Christmas Eve on Thursday only heightened investor angst seen last year as fears of a recession crept up amid intensified US-China trade tensions and a fourth rate hike by the Federal Reserve in 2018. Washington’s political malaise is adding to frustration.
“The shutdown does weigh on the markets, even though I don’t get it. It’s not like the whole government shuts down,” said Bryce Doty, senior vice president at Sit Investment Associates.
“It’s not necessarily about the government shutdown -- they’re quibbling over $5 billion when you have a deficit of over a trillion. Is this symbolic of what’s to come?” – Agencies
