Asian markets were mixed on Monday, with Shanghai surging almost four percent to build on a rally at the end of last week but traders still cautious over geopolitical tensions. A close eye is being kept on China this week after Vice Premier Liu He led the country’s top economic officials in a coordinated drive to shore up beleaguered equities, which have fallen more than a quarter this year. The Shanghai Composite Index piled on more than two percent after that, with observers suggesting government-backed funds known as the National Team helped provide support. And those gains filtered through to Monday after further support measures, with President Xi Jinping promising help for non state-backed firms, while authorities also unveiled a plan to lower taxes. The moves came as data Friday showed the world’s number two economy grew at its slowest pace for nine years during the third quarter. The announcements helped Shanghai rise 3.9 percent Monday, while Hong Kong added more than one percent. Stephen Innes, head of Asia-Pacific trade at OANDA, said: “The big noise in local markets is the much-anticipated personal tax cuts are a bit more free-handed than had been expected. And what investor doesn’t like the sound of tax cuts?” However, he added Chinese “markets remain under pressure from every economic angle leaving more than a few investors extremely sceptical Friday’s recovery will have lasting legs”. Geopolitics in focus Elsewhere in Asia, Singapore, Manila and Jakarta were also in positive territory, while Tokyo ended the morning 0.3 percent lower, while there were losses in Sydney, Seoul and Taipei. While China-US trade tensions simmer, investors are also having to consider other brewing problems, with the US saying it will pull out of a decades-old nuclear treaty with Russia, which Donald Trump accused the country of long violating. Russian deputy foreign minister Sergei Ryabkov warned withdrawal “would be a very dangerous step”. That comes as pressure grows on Saudi Arabia as it admitted a journalist critical of Riyadh had been killed at its Istanbul consulate. “Geopolitics looks like dominating the news flow this week and what that does to risk sentiment and oil prices will… be important for markets,” said Ray Attrill, head of forex strategy at National Australia Bank. He added that this would be “most obviously regarding the international outrage over Jamal Khashoggi’s killing and now the US decision to pull out of the 1987 Intermediate Nuclear Forces Treaty ahead of a visit to Moscow by John Bolton, President Trump’s hawkish national security adviser.” There are also concerns about an increasing row between Italy and the European Union over the populist government’s wallet-busting budget. Officials in Brussels said the spending plan was an “unprecedented” deviation from EU rules, while Moody’s downgraded Italy’s debt rating by a notch. Key figures Shanghai – Composite: UP 3.9 percent at 2,649.02 Tokyo – Nikkei 225: DOWN 0.3 percent at 22,462.54 (break) Hong Kong – Hang Seng: Up 1.5 percent at 25,938.96 Euro/dollar: DOWN at $1.1501 from $1.1511 at 2100 GMT on Friday Pound/dollar: DOWN at $1.3054 from $1.3066 Dollar/yen: DOWN at 112.44 from 112.50 yen Oil – West Texas Intermediate: DOWN five cents at $69.07 per barrel Oil – Brent Crude: DOWN eight cents at $79.70 per barrel New York – Dow Jones: UP 0.3 percent at 25,444.34 (close) London – FTSE 100: UP 0.3 percent at 7,049.80 (close). Published in Daily Times, October 23rd 2018.