AFP

Asian equities mostly rose Friday as a drop in oil prices to pre-Ukraine war levels stirred hopes of a slowdown in inflation and central bank interest rate hikes, while focus turns to key US jobs data later in the day.

However, while markets have enjoyed a broadly positive week, optimism remains at a premium as traders fret over issues including the conflict in Eastern Europe, China’s military drills around Taiwan and a possible global recession.

Crude edged up but expectations that economies will contract — dampening demand — have sent the commodity tumbling more than 10 percent this week, with US data indicating Americans were driving less now than in summer 2020 at the height of the pandemic.

And while analysts are beating the drum of recession, traders are taking heart from the possibility of a reprieve from central bank monetary tightening.

“The recent fall in oil prices, which are now trading below the levels immediately before Russia’s invasion of Ukraine, has contributed to the market’s perception that inflation is likely to peak soon, taking pressure off the Fed to raise rates as aggressively,” said National Australia Bank’s Rodrigo Catril. 

Traders will now be closely watching the release of a crucial US jobs report later Friday for a fresh snapshot of the world’s top economy.

The Federal Reserve has said its rate decision will be guided by data, with signs of economic weakness seen as likely to mean any increases will be light.

Officials have said the economy remains healthy despite four-decade high inflation and a sharp lift in borrowing costs, while several have suggested they are open to more big increases to get on top of prices.

And SPI Asset Management’s Stephen Innes said: “Though some high-frequency data suggest employment and inflation have softened in some parts of the economy, markets may wonder if they are soft enough to change the course for the Fed.”

In a sign of the long road ahead, the Bank of England hiked rates by the most since it was made independent in 1997, and warned inflation will likely go higher than 13 percent while Britain will suffer an extended recession.

Wall Street provided a soft lead after recent gains, but Asia was largely higher.

Tokyo, Shanghai, Sydney, Seoul, Jakarta, Wellington and Singapore rose, though Hong Kong and Manila dipped.

Taipei surged more than two percent on easing concerns over a conflict with Beijing, even as China conducts its largest-ever military exercises around Taiwan in response to US House Speaker Nancy Pelosi’s visit this week.

China launched a series of exercises in multiple zones Thursday, straddling some of the busiest shipping lanes in the world.

While Taipei did not say where the missiles landed or whether they flew over the island, Japan said that of the nine missiles it had detected, four were “believed to have flown over Taiwan’s main island”.

Geir Lode, of Federated Hermes, said: “For a world facing a whole raft of major challenges, there sure is a lot of optimism across equities right now.

“Inflation is challenging corporate earnings and weighing on consumer sentiment. Global recession appears probable as growth becomes ever more scarce. Geopolitical tensions and the growth in populism accelerate the trend towards localisation (and increase the risk of even darker futures). Climate change looms over us all.

“And yet equities this week have continued July’s strong rally.”

– Key figures at around 0300 GMT –

Tokyo – Nikkei 225: UP 0.7 percent at 28,131.87 (break)

Hong Kong – Hang Seng Index: DOWN 0.1 percent at 20,145.45

Shanghai – Composite: UP 0.1 percent at 3,191.55

Euro/dollar: DOWN at $1.0233 from $1.0248 Thursday

Pound/dollar: DOWN at $1.2139 from $1.2166

Euro/pound: UP at 84.31 pence from 84.21 pence

Dollar/yen: UP at 133.22 yen from 132.95 yen

West Texas Intermediate: UP 0.4 percent at $88.87 per barrel

Brent North Sea crude: UP 0.2 percent at $94.35 per barrel

New York – Dow: DOWN 0.3 percent at 32,726.82 (close)

London – FTSE 100: FLAT at 7,448.06 (close)

South Korea’s first lunar orbiter successfully launched on a year-long mission to observe the Moon, Seoul said Friday, with the payload including a new disruption-tolerant network for sending data from space.

Danuri — a portmanteau of the Korean words for “Moon” and “enjoy” — was on a Falcon 9 rocket launched from Cape Canaveral in Florida by Elon Musk’s aerospace company SpaceX. It aims to reach the Moon by mid-December.

“South Korea’s first lunar orbiter ‘Danuri’ left for space at 8:08 am on August 5, 2022,” Seoul’s science ministry said in a tweet, sharing a video of the rocket blasting off trailing a huge column of smoke and flames.

“Danuri will be the first step towards the Moon and the farther universe,” it said, apparently referring to the country’s ambitious space program, which includes plans for a Moon mission by 2030.

SpaceX tweeted that the launch had been a success.

“Deployment of KPLO confirmed,” it said, referring to Danuri using an acronym of its official name, the Korea Pathfinder Lunar Orbiter.

During its mission, Danuri will use six different instruments, including a highly sensitive camera provided by NASA, to conduct research, including investigating the lunar surface to identify potential landing sites.

One of the instruments will evaluate disruption-tolerant, network-based space communications, which, according to South Korea’s science ministry, is a world first.

– BTS in space –

Danuri will also try to develop a wireless Internet environment to link satellites or exploration spacecraft, they added.

The lunar orbiter will stream K-pop sensation BTS’ song “Dynamite” to test this wireless network.

Another instrument, ShadowCam, will record images of the permanently shaded regions around the poles of the Moon where no sunlight can reach.

Scientists also hope that Danuri will find hidden sources of water and ice in areas of the Moon, including the permanently dark and cold regions near the poles.

“This is a very significant milestone in the history of Korean space exploration,” said Lee Sang-ryool, head of the Korea Aerospace Research Institute, in a video shown before the launch.

“Danuri is just the beginning, and if we are more determined and committed to technology development for space travel, we will be able to reach Mars, asteroids, and so on in the near future.”

South Korean scientists say Danuri — which took seven years to build — will pave the way for the nation’s more ambitious goal of landing on the Moon by 2030. 

“South Korea will become the seventh country in the world to have launched an unmanned probe to the Moon,” an official at the Korea Aerospace Research Institute told AFP.

“We hope to continue contributing to the global understanding of the Moon with what Danuri is set to find out.”

– Lunar ambitions –

Danuri was launched by a private company — SpaceX — but South Korea recently became one of a handful of countries to successfully launch a one-tonne payload using their own rockets.

In June, the country’s homegrown three-stage rocket nicknamed Nuri — a decade in development at a cost of 2 trillion won ($1.5 billion) — launched successfully and put a satellite into orbit, on its second attempt after a failure last October.

That launch — coupled with Danuri’s launch Friday — helps bring South Korea ever closer to achieving its space ambitions.

In Asia, China, Japan and India all have advanced space programmes — and the South’s nuclear-armed neighbour North Korea has also demonstrated satellite launch capability.

Ballistic missiles and space rockets use similar technology and Pyongyang put a 300-kilogram (660-pound) satellite into orbit in 2012 in what Washington condemned as a disguised missile test.

Embattled Chinese property giant Evergrande has cancelled a contract to build a football stadium in a southern city in return for 5.52 billion yuan ($818 million), it said in a filing.

The real estate behemoth has been involved in restructuring negotiations after racking up $300 billion in liabilities in the wake of  Beijing’s crackdown on excessive debt and rampant speculation in the property sector.

Last week, the company failed to meet a self-imposed deadline to publish a preliminary restructuring proposal, although it said it has made positive progress.

In a filing to the Hong Kong stock exchange late Thursday, Evergrande said “the group’s liquidity issue has adversely affected the development of and construction on the land” in Guangzhou.

Evergrande entered a contract with the city’s authorities in 2020 for use of the land, designated for sports and industrial purposes.

The contract allowed for commercial and sports uses of the land for 40 years, as well as other business uses for 50 years, the filing said.

Evergrande had started construction, including the building of the Guangzhou Evergrande Football Stadium, which was set to have at least 80,000 seats, it said.

The latest refund will enter a project escrow account designated by the government and will be used to settle debts relating to the deal, Evergrande said.

“It is expected that the group will record a loss of approximately 1.255 billion” yuan over the total book value of the land along with buildings, structures and other items at the site after deducting the refund, Evergrande said.

Evergrande, one of China’s biggest developers, has scrambled to offload assets in recent months, with chairman Hui Ka Yan paying off some of its debts using his personal wealth.

It has also found a potential buyer for its Hong Kong headquarters, according to earlier media reports.

Its troubles are emblematic of the problems rippling across China’s massive property sector, with smaller companies also defaulting on loans and others struggling to raise cash.

Cash-strapped developers have increasingly struggled to deliver projects on time, sparking mortgage boycotts from angry homebuyers in many cities.

Dozens of rescuers battled Thursday to free 10 workers trapped in a flooded coal mine in northern Mexico, where desperate relatives waited for news more than 24 hours after a cave-in.

As night fell again in Coahuila state, family members cried and comforted each other while hopes of finding survivors dimmed with each passing hour.

“What we want is for them to retrieve the bodies,” Angelica Montelongo said with a sad and tired look, before summoning up new hope that her brother Jaime would be rescued.

“But hey, God willing, right? You have to have faith that they’re alive,” she said.

Soldiers, emergency workers and rescue dogs were deployed to the mine in Agujita in the municipality of Sabinas after the latest disaster to strike Mexico’s main coal-producing region.

“What I want with all my soul is that we rescue the miners,” President Andres Manuel Lopez Obrador told reporters in Mexico City.

“We must not lose faith. We must not lose hope,” he added.

Five miners managed to escape alive after the cave-in Wednesday and were taken to hospital, civil defense national coordinator Laura Velazquez said, adding that two had been discharged.

“Time is crucial here,” she said.

Authorities said the mine’s three shafts descended 60 meters (200 feet) and the floodwater inside was 34 meters deep.

“It’s complicated,” Velazquez said.

But the authorities were making progress and pumping out water “to rescue the miners as soon as possible,” she added.

– ‘Not much hope’ –

Around 230 army and other government personnel were sent to the site, about 1,130 kilometers (700 miles) north of Mexico City, the defense ministry said.

Several pumps were being used to tackle the flooding, but Lopez Obrador urged the national water agency to send more equipment.

“Unfortunately, there’s not much hope,” Jose Luis Amaya, whose cousin was among those trapped, told Milenio TV.

Experts and relatives painted a picture of a precarious profession fraught with risks extracting coal from the mines with lax safety standards.

“There’s always job insecurity… and danger,” said Blasa Maribel Navarro, whose cousin Sergio Cruz has mined coal for several years to support his two daughters.

Navarro said she was still hopeful of seeing him alive “because we trust in God.”

Crudely constructed mines like the one that collapsed lack concrete reinforcements to protect workers from a cave-in, engineering expert Guillermo Iglesias said.

The miners “dig a shaft two meters in circumference and keep digging until they reach a small layer of coal,” he told local radio.

The only thing supporting the surrounding earth is usually a large plastic tube through which the workers enter, he added.

Coahuila’s state government said the miners had been carrying out excavation work when they hit an adjoining area full of water, causing the shaft to collapse and flood.

Coahuila has seen a series of fatal mining accidents over the years.

Last year, seven miners died when they were trapped in the region.

The worst accident was an explosion that claimed 65 lives at the Pasta de Conchos mine in 2006.

Only two bodies were rescued after that tragedy and the families have repeatedly urged the Mexican authorities to recover them.