Shanghai, Hong Kong lead gains as Comey in view

Shanghai and Hong Kong led most Asian markets higher yesterday after Chinese trade data beat forecasts, even as investors await Britain’s election results and testimony from fired FBI boss James Comey on his probe into the Trump administration’s Russia links.Traders are on tenterhooks ahead of the big events, which could either fuel a sharp sell-off or reignite a rally that has seen some indexes hit multi-year – and even all-time – highs in recent weeks.Beijing said Chinese exports soared 8.7% on-year and imports jumped 14.8%, compared with estimates of 7.2% and 8.3% tipped in a Bloomberg News survey.The figures came as a relief after a series of weak readings suggested a recent pick-up could be fizzling out despite a pick-up in the global economy.Shanghai, which had spent most of the morning in the red, ended 0.3% higher, while Hong Kong also added 0.3% to end above 26,000 for the first time since July 2015.Sydney, Seoul and Singapore each gained 0.2%.But Tokyo ended 0.4% lower at 19,909.26, hit by profit-taking and news that the Japanese economy grew at a slower rate than first thought in January-March.The main focus is on Comey’s evidence to a congressional committee, which could be damaging to US President Donald Trump and his economy-boosting agenda.In written testimony released Wednesday, Comey said the tycoon urged him to drop a probe into former national security adviser Michael Flynn and his contacts with Russia, confirming news reports.However, US markets were unfazed by the letter, which Stephen Innes, senior trader at OANDA, said “offered no smoking gun or impeachment-worthy bombshells and only repeated what the market had already known”.British Prime Minister Theresa May’s Conservatives are expected to win the national vote, but their once commanding lead in opinion polls has been slashed since she called it, leading to fears of political uncertainty ahead of key Brexit talks.However, the pound remains buoyant on expectations of a Conservative win, with analysts predicting it could jump to $1.32 if May wins a comfortable majority.It is currently at $1.2973.The euro was struggling on speculation the European Central Bank will lower its eurozone inflation forecasts through to 2019, leading to worries it will stick to its loose monetary policy.The single currency had been rallying on hopes the lender, which holds a meeting yesterday, would begin to tighten monetary policy as the bloc’s economy picks up.Oil prices edged back after sinking more than 5% Wednesday on data showing an unexpected rise in US stockpiles, including gasoline, a particularly troubling sign for demand as the country’s summer driving season kicks in.The reading overshadowed an agreement last month by Opec and Russia to extend a production cut in order to address an ongoing supply glut that is weighing on prices.“Any chat of more Opec cuts is likely to fall on deaf ears should they be made because the point of the cuts is to lead to a supply deficit,” said Greg McKenna, chief market strategist at AxiTrader.Among Asian energy firms Woodside Petroleum fell 1.6% in Sydney while Hong Kong-listed CNOOC shed 0.6%. Inpex was down 1% in Tokyo.