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Markets in recovery mode after midweek stumble

Friday 06:00 GMT

Overview

Asian stock markets continued to recover after a midweek sell-off and as a highly anticipated vote on US healthcare reform was pushed back until later on Friday.

European bourses are expected to open on the front foot, with spreadbetters predicting the UK’s FTSE 100 will add 8 points to 7,349 and Germany’s Dax to advance 20 points to 12,060.

Hot topic

Global markets are in recovery mode after a sharp midweek tumble that handed a number of equities benchmarks their worst one-day falls since the US presidential election, and in the case of the S&P 500, since October.

Divisions within the US Republican party over President Donald Trump’s plans to repeal Obamacare spurred concerns among investors that Mr Trump might struggle to get his other pro-business policies passed.

The vote has been delayed to later on Friday, with Mr Trump issuing an ultimatum to House Republicans that they either pass the bill overhauling the nation’s healthcare system or reject it and he will move on to the rest of his legislative agenda.

The S&P 500 closed 0.1 per cent lower on Thursday but futures are now tipping the benchmark to open 0.1 per cent higher following the president’s ultimatum. The US dollar index is 0.2 per cent higher at 99.965, eyeing its first back-to-back daily gain in almost a fortnight.

Equities

Japan’s Topix was up 0.9 per cent, with a strong showing from the banking sector, which may benefit if Mr Trump’s other plans to pare back financial regulation in the US succeed.

Banks led Australia’s S&P/ASX 200 index to close 0.8 per cent higher as a number of lenders announced increases in certain mortgage rates in response to higher funding costs.

Hong Kong’s Hang Seng was down 0.2 per cent while China’s Shanghai Composite added 0.2 per cent.

Forex

The yen was 0.4 per cent weaker on Friday at ¥‎111.33 as a survey of manufacturing activity fell in March to its lowest point this year. The Japanese currency on Thursday strengthened for an eighth straight day — the longest winning streak since early 2011.

The Australian dollar was down 0.2 per cent at $0.7614 and facing a four-day losing streak — its longest this year.

Also weak on Friday was the British pound, down 0.3 per cent at $1.248 and looking to end a three-day run.

Commodities

Gold, which had performed solidly in the first part of this week as the US dollar sold off, was down 0.2 per cent at $1,242 a troy ounce.

Brent crude, the international oil benchmark, was up 0.3 per cent at $50.72 a barrel while West Texas Intermediate added 0.4 per cent to $47.91.

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