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Asian markets rise again as investors make most of feel-good vibe

Asian markets rose again on Friday as the feel-good factor that fired investors the day before looked set to push into the weekend, fuelled by upbeat data and trade optimism.

A growing sense that Britain could avoid crashing out of the European Union was adding to the positive vibe and keeping the pound at a more than one-month high against the dollar.

After a tumultuous August, dealers were given a much-needed shot in the arm this week with news that China and the United States would resume high-level trade talks next month in Washington.

This week also saw China flag plans for fresh economy-boosting measures, while data out of Washington on Thursday showed August private-sector jobs creation beat the previous month and was higher than expected.

"In recent months, there has been a lot of tough talk from both sides, but the prospect of the two sides sitting down, and holding trade talks has lifted sentiment," said David Madden, market analyst at CMC Markets UK.

"The trade spat has been going on for well over a year, and it is unlikely to be wrapped up soon, but at the moment things are going in the right direction."

A forecast-topping read on the US services sector provided extra joy to investors.

The reports set the scene for the much-anticipated release of non-farm payrolls later on Friday, which are closely watched for clues about the state of the world's top economy.

The reading could also give an idea about the Federal Reserve's plans for interest rates this year, with observers expecting it to unveil more cuts this year. Expectations for an extended run of reductions has lent much-needed support to markets this year.

However, Kristina Hooper, chief global market strategist at Invesco, said: "While this has been some positive economic data, it makes it a little more difficult for the Fed to cut rates."

Alluding to an upcoming speech on Friday by Fed boss Jerome Powell, she told Bloomberg TV: "I suspect what we will hear from Powell is a very tepid commentary on the Fed's ability to provide monetary policy accommodation."

Sterling up as Boris struggles

The Fed warned this week that uncertainty created by Donald Trump's trade wars with China and Europe could cut 1% off the US economy through early next year, while companies say investment and hiring decisions are being affected.

Hong Kong finished up 0.7%, with dealers seeming to brush off news that Fitch had downgraded its sovereign debt rating citing the sometimes violent protests in the financial hub.

Shanghai, Tokyo and Sydney all ended 0.5% higher.

Seoul and Taipei finished 0.2% higher, Wellington piled on one percent and Taipei added 0.2%. Singapore was up 0.1%, Manila rallied 0.7%, Mumbai put on 0.6% and Jakarta rose 0.3%.

Observers said markets might be able to calm down as China prepares for a week-long holiday to mark the 70th anniversary of its founding on October 1.

"This then suggests that a market-friendly environment of no new US-China trade news over the coming weeks looks likely with focus over the remainder of September set to be centred around major central banks' policy intentions," said Rodrigo Catril at National Australia Bank.

Traders are keeping a keen eye on Westminster where Prime Minister Boris Johnson's bid to pull Britain out of the European Union on October 31 has been left in tatters by MPs expected to push through a bill to avoid a no-deal exit.

The new PM has been dealt a number of blows this week after pro-EU members of his party rebelled, while he has also been unable to muster enough votes to call a general election with the opposition only willing to go to the polls once its bill has been made law.

While the crisis has fuelled fresh uncertainty in the country, the pound is rising at levels not seen since the end of July, having fallen on Tuesday to its weakest level since 1985, except for a 2016 "flash crash".

In early trade London eased 0.1%, Paris was flat and Frankfurt added 0.2%.

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