Asian shares stumble as China extends declines amid trade tensions

Asian Stock Markets

Asian stocks traded mostly lower on Tuesday, with greater China markets extending their declines as investor worries over Beijing's trade relations with the U.S. soured sentiment in the region.

China markets pulled back, extending the last session's sharp declines. The Shanghai composite sank 1.27 percent after touching two-year lows in the last session and the Shenzhen composite pulled back by 1.36 percent.

Hong Kong's Hang Seng Index plunged 3.08 percent as markets there reopened for trade after a holiday, with the energy and services sectors leading losses. Heavily weighted financials also slumped, with HSBC down 2.79 percent, while technology blue chip Tencent dropped 2.74 percent.

Asian stocks traded mostly lower on Tuesday, with greater China markets extending their declines as investor worries over Beijing's trade relations with the U.S. soured sentiment in the region.

China markets pulled back, extending the last session's sharp declines. The Shanghai composite sank 1.27 percent after touching two-year lows in the last session and the Shenzhen composite pulled back by 1.36 percent.

Hong Kong's Hang Seng Index plunged 3.08 percent as markets there reopened for trade after a holiday, with the energy and services sectors leading losses. Heavily weighted financials also slumped, with HSBC down 2.79 percent, while technology blue chip Tencent dropped 2.74 percent.
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Elsewhere, Japan's Nikkei 225 turned lower, declining 0.65 percent after earlier retracing some of the sharp declines seen in the overnight session. Airlines and oil producers clung to gains, while most other sectors eased.

In South Korea, the Kospi edged down by 0.37 percent. Manufacturers and technology plays were mixed, with Samsung Electronics gaining 0.99 percent while steelmaker Posco lost 2.06 percent. The S&P/ASX 200, however, bucked the broader trend to rise 0.51 percent.

Meanwhile, MSCI's index of stocks in Asia Pacific outside of Japan sank 1.22 percent in Asia morning trade.

Investors were cautious as markets continued to watch developments on the trade front. A looming July 6 deadline is set to see the U.S. impose a 25 percent tariff on $34 billion worth of Chinese goods from more than 800 product categories. China has also announced that it will retaliate with duties on the same value of U.S. products.

"While we still think that a full-blown trade war is unlikely, the harsh rhetoric and punitive measures have reached a point that warrants serious consideration of such eventualities," Tamur Baig, chief economist at DBS Bank, said in a note. He added that the U.S. would likely be hurt more than China if a trade war ensues, given how China's retaliation can be on multiple fronts and the U.S. is involved in more than one trade spat.

The U.S. is also engaged in disputes on trade issues with other key trading partners, including Canada and the European Union. The U.S. could face tariffs from the European Union on as much as $300 billion in U.S. goods if the Trump administration proceeds with imposing duties on European cars, the Financial Times reported.

Markets in Europe and Asia closed lower in the previous session amid the concerns over trade, with the pan-European Stoxx 600 declining 0.84 percent. Asian stock indexes saw steeper losses as China markets resumed their slide after getting some reprieve at the end of last week, with the Shanghai composite dropping 2.52 percent on Monday.

Amid the market moves ahead of that July 6 deadline for tariffs, U.S. Commerce Secretary Wilbur Ross told CNBC there was no "bright line level of the stock market" that would change U.S. President Donald Trump's mind on trade policy.

Those jitters also overshadowed the moderate gains made on Wall Street overnight, with U.S. stocks closing in positive territory after dipping early in the overnight session on trade concerns. The Dow Jones Industrial Average rose 0.15 percent, or 35.77 points, to close at 24,307.18.

Investor jitters over trade concerns, meanwhile, supported the greenback. The dollar index, which tracks the dollar against a basket of currencies, traded at 94.925 at 11:24 a.m. HK/SIN after rising above the 95 handle in the overnight session. Against the yen, the dollar traded at 110.86.

Asian stocks battered as market turmoil spreads

Asian stock markets slumped Wednesday as jitters spread over Italy's escalating political crisis and renewed US-China trade tensions.

In morning trading, Japan's Nikkei fell 1.8%, Hong Kong's Hang Seng slid 1.3%, and China's Shanghai Composite was down 2%.

The losses across Asia came after sharp declines Tuesday in Europe and the United States, where the Dow closed down 1.6%.

Traders in Asia said investors were exiting riskier assets such as stocks after political turmoil in Italy sparked fears over the future of the euro and the White House revived plans to slap tariffs on $50 billion worth of Chinese goods.

Italy is headed for new elections after populist politicians failed to form a government, and investors worry the result could throw the European Union into turmoil. They are demanding higher yields to hold Italian government debt.

Investors in Asia are also worried about President Donald Trump's hardening stance on trade with China. The administration announced Tuesday that it would proceed with its proposal to impose 25% tariffs on $50 billion worth of goods from China and place new limits on Chinese investments in US high-tech industries.

The decision was a surprise, coming less than two weeks after China and the United States said they had agreed to put threats of new tariffs on hold.

China's Commerce Ministry said the Trump administration's latest announcement is "obviously in violation of the consensus" reached by the two countries in recent talks.

The gloomy mood may not continue in US markets later Wednesday, though. Dow futures indicated small gains.

Asian Stocks Mixed; Oil Extends Slide

Asian Stock Markets

Asian stocks struggled for traction Monday with energy shares tumbling after oil extended its biggest drop in about a year. The euro rallied after Italy’s president rejected a candidate for finance minister who’s been skeptical of the single currency.

Benchmarks dipped in Tokyo and Australia. South Korean stocks rose, as did U.S. futures, after President Donald Trump appeared to confirm that his June summit with North Korea’s Kim Jong Un was back on.

Hong Kong stocks advanced. Euro Stoxx 50 futures gained.

 The MSCI Asia Pacific Energy Index had the biggest decline after a Saudi minister said petroleum supply would likely rise in the second half. Oil slid further below $70 a barrel while the dollar slipped against most major peers.

Trading may be subdued round the world by U.S. and U.K. holidays Monday.

Investors turn their attention to the economy this week with readings on European inflation, Chinese manufacturing and Friday’s U.S. jobs report, the last before Federal Reserve policy makers meet in June. Italian assets will be in focus after that country sank deeper into political uncertainty, with populist leaders failing in their attempt to form a government.

Elsewhere, the Indonesian rupiah climbed amid speculation of another interest rate hike by the central bank, while the nation’s stocks and sovereign bonds also rallied, with the 10-year yield sliding about 20 basis points.

S&P/ASX 200 Index fell 0.5 percent.
Kospi index rose 0.8 percent.
Hang Seng Index gained 0.7 percent. Shanghai Composite Index fluctuated.
Futures on the S&P 500 advanced 0.5 percent.
Euro Stoxx 50 futures climbed 0.5 percent as of 8:05 a.m. in Frankfurt.
MSCI Asia Pacific Index rose 0.1 percent.
The Japanese yen fell 0.2 percent to 109.60 per dollar.
The rupiah gained 0.9 percent to 13,990 per dollar.
West Texas Intermediate crude plunged 2.4 percent to $66.24 a barrel after tumbling 4 percent on Friday.

China, HK stocks climb on chances of North Korea-U.S. summit

Asian Stock Markets

China and Hong Kong stocks climbed on Monday, on signs the United States and North Korea were still working towards holding a summit.

The CSI300 index rose 0.7 percent to 3,842.47 points at the end of the morning session, while the Shanghai Composite Index gained 0.2 percent to 3,146.85 points.

The Hang Seng index added 0.6 percent to 30,758.49 points, while the Hong Kong China Enterprises Index climbed 0.6 percent to 12,117.39 points.

U.S. President Donald Trump said on Sunday a U.S. team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, which Trump pulled out of last week before reconsidering.

Sentiment was also aided as worries eased over the trade tensions between China and the United States, after U.S. reached a deal to keep China's ZTE in business.

The Trump administration told lawmakers the U.S. government has reached a deal to put Chinese telecommunications company ZTE Corp back in business after it pays a significant fine and makes management changes, a senior congressional aide said on Friday.

Chinese Vice President Wang Qishan said on Friday there would be no winners if there was a trade war between China and the United States, but said Beijing had to be ready for any turn of events.
Investors also found solace after data showed profits earned by Chinese industrial firms in April rose at their fastest pace in six months.

Around the region, MSCI 's Asia ex-Japan stock index was firmer by 0.39 percent while Japan's Nikkei index was up 0.08 percent.

The yuan was quoted at 6.3902 per U.S. dollar, 0.02 percent firmer than the previous close of 6.3917.

The largest percentage gainers in the main Shanghai Composite index were Weilong Grape Wine Co Ltd up 10.03 percent, followed by Changbai Mountain Tourism Co Ltd gaining 10.02 percent and Suzhou Douson Drilling&Production Equipment Co Ltd up by 10 percent.

The largest percentage losers on the Shanghai index were Inner Mongolia BaoTou Steel Union Co Ltd down 8.46 percent, followed by Guangdong Dcenti Auto-Parts Stock Ltd Co losing 8.16 percent and Jiangsu Rutong Petro-Machinery Co Ltd down by 8.09 percent.

The top gainers among H-shares were CSPC Pharmaceutical Group Ltd, which climbed 5.18 percent, followed by PetroChina Co Ltd, which gained 4.63 percent and Air China Ltd that rose 3.83 percent.
The three biggest H-shares percentage decliners were China Gas Holdings Ltd, which fell 4.44 percent, CNOOC Ltd , which dropped 2.0 percent and ZhongAn Online P & C Insurance Co Ltd down by 1.0 percent.

As of 0402 GMT, China's A-shares were trading at a premium of 20.04 percent over the Hong Kong-listed H-shares.

Stocks Rebound as Korea Concerns Cool; Oil Falls

European Stock Markets

The Stoxx Europe 600 Index advanced, with most sectors in the green, and equity-index futures pointed to a higher U.S. open as concerns about an escalation in tensions over North Korea’s nuclear program eased. 

WTI crude slumped below $70 a barrel after a Saudi minister said supply would likely be boosted in the second half. Italy’s bonds dropped as worries mounted over its leadership, sending the spread between German and Italian 10-year yields above 2 percentage points. 

Earlier, stocks in Asia saw modest declines.

Investors are are taking a more sanguine view on geopolitical risks, after stocks declined from the U.S. to Asia as President Donald Trump blamed the “tremendous anger and open hostility” from Pyongyang for his decision to scrap his planned meeting with Kim Jong Un. While North Korea’s apparent willingness to keep talking appeared to soothe markets, other risks remain. 

Spain’s biggest opposition party is ready to push for a no-confidence motion against Prime Minister Mariano Rajoy, while tensions around global trade linger.

Elsewhere, Turkey’s lira swung between gains and losses, though still heading for its worst week since in eight years, after the central bank said it would allow exporters to repay dollar-denominated loans in the local currency, while the pound weakened after the European Union dismissed many of the U.K.’s plans for their post-Brexit relationship.


The Stoxx Europe 600 Index rose 0.5 percent as of 11:10 a.m. London time.
Futures on the S&P 500 Index rose 0.2 percent.
The U.K.’s FTSE 100 Index gained 0.2 percent.
Germany’s DAX Index increased 1.1 percent.
The MSCI Emerging Market Index rose 0.3 percent.
The MSCI Asia Pacific Index fell 0.1 percent.

Asia share markets hit by U.S. auto tariff threat, dollar pulls back

Asian Stock Markets

Asian shares fell on Thursday after the U.S. government launched a national security probe into auto imports that could lead to new tariffs, and President Donald Trump’s comments indicated fresh setbacks in U.S.-China trade talks. 

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.1 percent higher, but Japan's Nikkei stock index .N225 fell 1.2 percent as auto shares slumped. South Korea's KOSPI lost 0.3 percent.

A broad MSCI index of automobile and auto components firms .MIWO0AC00PUS was down 0.9 percent. Tokyo’s SE TOPIX transportation equipment index .ITEQP.T was 2.6 percent lower.

The U.S. Commerce Department said on Wednesday that it would launch a national security investigation into car and truck imports under Section 232 of the Trade Expansion Act of 1962, a move that could lead to tariffs like those imposed on steel and aluminium in March.

Adding to market jitters, Trump on Wednesday called for “a different structure” in any trade deal with China, fuelling uncertainty over the negotiations.

On Thursday, China’s Commerce Ministry said it had not pledged to cut China’s trade surplus with the U.S. by a certain figure, and that it hopes the U.S. implements measures promised during trade negotiations as soon as possible.

China's blue chip CSI 300 index .CSI300 was 0.1 percent lower.

Prompting further uncertainty, Trump on Wednesday cast doubt on plans for an unprecedented summit with North Korean leader Kim Jong Un, saying he would know next week whether the meeting would take place.

While the minutes from the Federal Reserve’s May 1-2 meeting indicated that policymakers expect another interest rate increase would be warranted “soon” if the U.S. economic outlook remains intact, they helped to ease market concerns that the Fed would accelerate the pace of interest rate increases.

The two-year Treasury note yield US2YT=RR, which rises with traders’ expectations of higher Fed fund rates, was at 2.5121 percent after touching 2.5970 on Wednesday.

The yield on benchmark 10-year Treasury notes US10YT=RR fell back below the 3-percent threshold to 2.9825 percent, compared with its U.S. close of 3.003 percent on Wednesday.

Analysts said that market uncertainty was prompting a clear flight to safety across financial markets.

The dollar was down 0.6 percent against the yen to 109.44 JPY=.

The euro EUR= was up 0.1 percent on the day at $1.1709. The dollar index .DXY, which tracks the greenback against a basket of six major rivals, was 0.2 percent lower at 93.839.

Concerns over trade, talks and tariffs overpowered indications of strong economic performance in two of the region’s major economies.

Confidence among Japanese manufacturers saw its first rise in fourth months, and service-sector sentiment rose to a record high in the latest Reuters Tankan poll, underscoring expectations that the Japanese economy will return to growth in the second quarter.

In South Korea, Finance Minister Kim Dong-yeon said the economy is on track for annual growth of 3 percent despite concerning indicators such as high youth unemployment.

The Bank of Korea held interest rates steady for a sixth straight month on Thursday, with inflation seen remaining below target and amid concerns a U.S.-China trade war would hurt regional economies.

In commodities markets, U.S. crude CLc1 was down 0.2 percent at $71.68 a barrel. Oil prices fell on Wednesday after an unexpected rise in U.S. crude and gasoline inventories.

Brent LCOc1 futures were 0.3 percent lower at $79.53 a barrel, continuing to move lower after rising above $80 for the first time since November 2014 last week.

The most-traded iron ore futures on the Dalian Commodity Exchange DCIOcv1 rose for the first time in six sessions on Thursday, gaining 0.3 percent.

Weak commodity prices continued to put pressure on Australian shares , which were 0.2 percent lower, extending losses into a sixth consecutive session. New Zealand's benchmark S&P/NZX 50 index .NZ50 was 0.7 percent higher.

Gold was slightly higher. Spot gold XAU= was traded at $1,294.11 per ounce.

Asian shares under pressure with Trump tempering Sino-U.S. trade optimism

Asian Stock Markets

Asian shares were mostly weak on Wednesday with investors cautious after U.S. President Donald Trump tempered optimism over progress made so far in trade talks between the world’s two largest economic powers. 

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent, while Japan's Nikkei .N225 lost as much as 1.4 percent to hit a 1-1/2-week low and the Shanghai Composite Index .SSEC retreated 0.6 percent.

On Wall Street, the S&P 500 .SPX shed 0.31 percent overnight, losing steam after hitting a two-month high.

Trump said on Tuesday he was not pleased with recent trade talks between the United States and China, souring the improved market sentiment following weekend comments from U.S. Treasury Secretary Steven Mnuchin that the “trade war” is “on hold”.

His remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts.

Trump also floated a plan to fine ZTE Corp (000063.SZ), (0763.HK) and shake up its management as his administration considered rolling back more severe penalties.

Further weighing on prices of risk assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resistant to giving up his nuclear weapons.

Investors fret Abe’s long-running cronyism scandal could attract more attention as the Ministry of Finance is due to release related documents on Thursday.

The cautious mood helped to underpin bonds. The 10-year U.S. Treasuries yield US10YT=RR stood at 3.054 percent, off Monday’s near seven-year high of 3.128 percent.

As lower U.S. yields sap the appetite for the dollar, the euro traded at $1.1754 EUR=, hovering above Monday's five-month low of $1.1717.

Against the yen the dollar slipped 0.4 percent to 110.47 JPY= from Monday's four-month high of 111.395.

The biggest mover in the currency market was the Turkish lira TRYTOM=D3, which fell more than two percent early on Wednesday to a record low of 4.8450 after rating agencies sounded the alarm on Tuesday over plans by President Tayyip Erdogan to tighten his grip on monetary policy.

The lira has fallen almost 15 percent so far this month.

In commodities, oil prices held firm near 3-1/2-year highs on potential supply concerns surrounding Venezuela and Iran.

U.S. West Texas Intermediate (WTI) crude CLc1 futures traded little changed at $72.01 a barrel, a 0.26 percent loss. They touched $72.83 a barrel, the highest since November 2014, on Tuesday.

Brent LCOc1 futures stood at $79.23 a barrel. Last week, the global benchmark topped $80 for the first time since November 2014.

Bitcoin BTC=BTSP dropped below $8,000 to five-week lows, entering a downtrend channel on technical charts. The cryptocurrency last traded at $7903.61, down 1.0 percent on the day.

Asian shares skid as dollar becomes strong and oil surges

Asian stock Markets

Asian shares skidded on Tuesday as a strong dollar sapped demand for emerging market assets while surging oil prices stoked concerns about a flare-up in inflation and faster U.S. interest rate increases. 

Japan’s Nikkei ended 0.2 percent lower and Australian shares fell 0.7 percent. Chinese stocks were in the red too with the blue-chip CSI300 off 0.5 percent.

Liquidity was relatively thin due to holidays in South Korea and Hong Kong.

Even though most major Asian markets edged lower, MSCI’s broadest index of Asia-Pacific shares outside Japan managed to eke out a small 0.17 percent gain.

The index is well below an all-time peak of 617.12 points hit in January, and is flat so far this year after a super-charged 33.5 percent gain in 2017.

Those concerns offset the boost to sentiment from overnight gains on Wall Street over the apparent reconciliation between the United States and China over import duties.

Analysts said investors in the region were worried about the growth outlook, with the U.S. Federal Reserve staying on its policy tightening path.


JPMorgan’s Shigemi said investors will now turn their focus to the next Fed meeting on June 13 where it is widely expected to raise rates for a second time this year.

A total of three hikes is almost fully priced-in by the market for 2018 although some investors expect the Fed to be more aggressive.

It was the fear of higher inflation and thus faster Fed rate rises that caused a bond market rout earlier this year, sending yields sharply higher and triggering a share market sell-off.

The dollar hovered near five-month highs against a basket of currencies, boosted by the U.S.-China trade optimism.

The dollar index was last down 0.1 percent at 93.56 from Monday’s top of 94.058.


The Japanese yen steadied near four-month lows at 111.05 per dollar, while sterling eased 0.1 percent to $1.3416 as investors prepared for key data that could determine whether the Bank of England raises rates in 2018.

Elsewhere, oil prices soared to their highest since 2014 after Venezuela’s presidential election heightened worries that the country’s oil output could fall further.

The market is also weighing the possibility of additional U.S. sanctions on the country.

U.S. crude added 26 to $72.50 per barrel and Brent rose 19 cents to $79.40.

The combination of higher oil and conciliatory actions on the US-China trade front boosted the Australian dollar, a liquid proxy for risk, to a one-month peak.

As the dollar strengthened, gold prices eased to stay near the lowest since late December at $1,289.68.

Nikkei rises with easing US-China trade tensions

Asian Stock Markets

Japan's Nikkei share average rose on Monday as the dollars' rise against the yen supported some exporters after news of easing US-China trade tensions, but weakness in financial stocks kept wider gains limited.

The Nikkei ended 0.3 per cent higher at 23,002.37, after the dollar rose 0.5 per cent to 111.245 yen, hitting a fresh four-month high in Asian trade.

The Nikkei broke the psychologically important level of 23,000 for the first time since early February. Analysts see the next resistance level at 23,122.45, an intraday low marked on Feb. 2.

However, the broader Topix edged 0.1 per cent lower to 1,813.75, with only 1.29 billion shares changing hands, the lowest volume since early April.

US stock futures gained after Treasury Secretary Steven Mnuchin said on Sunday that the United States and China had agreed put their tariff skirmishing "on hold" to work on a wider trade agreement.

The S&P 500 E-mini futures were up 0.6 per cent, the Nasdaq 100 e-minis were 0.7 per cent higher with Dow e-minis also up 0.9 per cent.

Daiwa Securities research found that companies expect a 2 per cent rise in pre-tax profits for the fiscal year through March 2019, and most of them expect the dollar to trade at 105 yen on average.

A weaker yen boosts the profits Japanese earn abroad when they are repatriated.

TDK Corp rose 2.2 per cent, Daikin Industries was up 1.4 per cent and Nitto Denko gained 2.2 per cent.

Insurers and banks underperformed. MS&AD Insurance fell 4.0 per cent, while Mizuho Financial Group shed 0.8 per cent.

Elsewhere, Japan Tobacco slid 1.3 per cent after the company reported weaker domestic market tobacco sales in the month of April.

Asian stocks steadies amid caution over U.S.-China trade talks

Asian Stock Markets

Asian stocks were steady on Friday amid caution over developments in U.S.-China trade negotiations, while the dollar perched near a five-month peak after the benchmark U.S. Treasury yield hit its highest in seven years. 

Spreadbetters expected European stocks to open mixed, with Britain’s FTSE dipping 0.1 percent, Germany’s DAX rising 0.13 percent and France’s CAC little changed.

MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed. The index was headed for a 1 percent loss this week.

Hong Kong’s Hang Seng rose 0.17 percent and Shanghai climbed 0.3 percent as some investors bet Beijing and Washington will reach a deal in the latest round of trade talks. [.SS]

Japan’s Nikkei rose 0.35 percent, South Korea’s KOSPI was up 0.3 percent and Australian stocks dipped 0.2 percent.

Wall Street ended slightly lower on Thursday as investors grappled with U.S.-China trade tensions after U.S. President Donald Trump said that China “has become very spoiled on trade”.

But helping ease some of the tension, Beijing has offered Trump a package of proposed purchases of American goods and other measures aimed at reducing the U.S. trade deficit with China by some $200 billion a year, U.S. officials familiar with the proposal said.

A second round of talks between senior Trump administration officials and their Chinese counterparts started on Thursday, focused on cutting China’s U.S. trade surplus and improving intellectual property protections.



In currencies, the dollar index against a basket of six major currencies was steady at 93.471 after rising to a five-month peak of 93.632 on Thursday.

The index has gained about 1 percent this week, buoyed by the surge in U.S. Treasury yields, with the 10-year U.S. Treasury note yield hitting a seven-year peak of 3.128 percent.

The euro was up 0.1 percent at $1.1805, but not far off a five-month trough of $1.1763 brushed on Wednesday. The currency has fallen nearly 1.2 percent this week, largely pressured by Italian political uncertainty.

Reports this week that Italian populist parties likely to form the country’s next government may ask the European Central Bank for debt forgiveness have raised concerns about Italy abandoning fiscal discipline.

The dollar extended an overnight rally and rose to 111.005 yen, its highest since late January. The greenback has gained about 1.4 percent against its Japanese peer this week.

Emerging market currencies have also lost ground against the dollar this week as the rise in U.S. yields showed little signs of slowing.

The Turkish lira fell to a record low against the dollar this week, the Brazilian real plumbed a two-year low while Mexico’s peso has shed more than 5 percent this month.

A retreat by Indonesia’s rupiah to a 2-1/2-year low prompted the central bank to tighten monetary policy on Thursday for the first time since 2014 to support the currency.

In commodities, Brent crude oil futures were 16 cents higher at $79.46 a barrel after rising to $80.50 on Thursday, their highest since November 2014.

Brent has risen 3 percent this week and is headed for a sixth week of gains.

A rapid slide in oil supply from Venezuela, concern that U.S. sanctions will disrupt exports from Iran, and falling global inventories have all combined to push oil prices up nearly 20 percent in 2018. [O/R]

Inflation concerns, strong U.S. economic indicators and worries over increasing debt supply have pushed Treasury yields higher this week.

Nikkei falls as US yield spikes, MUFG tumbles after earnings

Asian Stock Markets

Japanese stocks edged lower on Wednesday as sentiment was knocked by a surge in U.S. Treasury yields to seven-year highs and after Pyongyang called off talks with Seoul, throwing a major U.S.-North Korean summit into question.

Nisshin Steel Co jumped 16 per cent after Nippon Steel & Sumitomo Metal Corp said in the afternoon that Nisshin will become its wholly owned subsidiary next January via a share exchange.

The Nikkei ended 0.4 per cent lower to 22,717.23.

Data in the morning showing the world's third-biggest economy suffered a deeper-than-expected contraction in the first-quarter also checked buyers.

Japan's economy contracted a more than expected 0.6 per cent in the January-March period on an annualised basis, putting an end to eight straight quarters of expansion.

In the U.S. market overnight, the yield on 10-year U.S. Treasury notes jumped to its highest level since July 2011, driven by upbeat consumer spending and factory data.

That has raised doubts about the planned summit between U.S. President Donald Trump and his North Korean counterpart leader Kim Jong Un scheduled next month

Wednesday's big losers included Mitsubishi UFJ Financial Group, which fell 2.4 per cent after the bank's annual net profit missed analyst estimates and on disappointment over the size of a share buyback plan.sshin Steel Co jumped 16 per cent after Nippon Steel & Sumitomo Metal Corp said in the afternoon that Nisshin will become its wholly owned subsidiary next January via a share exchange.

Stocks Drop in Asia as Facebook data flap spooks tech stocks

Asian Stock Markets

Stocks in Asia fell, following U.S. equities lower after a sell-off in technology shares bruised trader sentiment before a key Federal Reserve policy meeting.

Equities fell from Japan to Australia and technology stocks were the biggest drag on the MSCI Asia Pacific Index. U.S. shares slumped as the best performing sector this year was roiled by reports of a Facebook Inc. data breach and Apple Inc. efforts to develop its own screens.

After the bell, Oracle Corp. reported sales that underwhelmed investors and Nasdaq futures remained lower. Currencies were steady along with 10-year Treasury yields.

The tech sell-off, that began in Asia on Monday and deepened during the Europe and U.S. sessions, sent jitters through equity markets at the start of a busy week that culminates in the first U.S. interest rate decision under new Federal Reserve Chairman Jerome Powell.

Powell has hinted to investors that he’s open to lifting the policy rate four times this year, rather than the three currently reflected in dot-plot forecasts. Some on Wall Street expect the median projection to rise to four at Wednesday’s meeting, while others say there will be no change following a round of mediocre data and policy makers’ stated intentions to move gradually.

Japan’s Topix index fell 0.7 percent and the Nikkei 225 Stock Average slid 0.9 percent as of 12:30 p.m. in Tokyo.

South Korea’s Kospi index fell 0.4 percent.

Hong Kong’s Hang Seng Index retreated 0.6 percent.

Shanghai Composite Index was down 0.3 percent.

The yen fell 0.1 percent to 106.24 per dollar.

The yield on 10-year Treasuries was steady at 2.85 percent.  

Fresh concerns over politics drives Nikkei lower at the start of the week

Asian Stock Markets

Asian share markets traded mixed on Monday as caution gripped investors in a week in which the Federal Reserve is likely to hike U.S. interest rates and perhaps signal that as many as three more lie in store for the rest of the year. 

Japan's Nikkei .N225 extended early losses to drop 0.9 percent as exporters were undermined by recent broad-based strength in the yen.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.35 percent, but China .CSI300 managed to eke out some gains.

The guarded mood was not confined to Asia, with the June contract for E-Minis futures on the S&P 500 ESc1 down 0.3 percent and FTSE futures FFIc1 off 0.2 percent.

While Wall Street had bounced on Friday, the major indices still ended lower for the week. The Dow .DJI lost 1.57 percent, the S&P .SPX 1.04 percent and the Nasdaq .IXIC 1.27 percent.

The decline was somewhat surprising given figures from Bank of America Merrill Lynch showed a record $43.3 billion of inflows into equities last week, outpacing bond flows for the first time since 2013.

For the year so far, $9.8 billion has gone into tech stocks and $7.3 billion into financials, while $41 billion has flowed into emerging markets and $31 billion into Japan.

Whether the cash continues to flow could depend on what the Fed decides on Wednesday. It is  expected that the Fed would raise rates to between 1.5 percent and 1.75 percent on Wednesday.

They were less certain on whether the “dot plot” forecasts of committee members will stay at three hikes this year or shift higher.

It will also be the first press conference for new Fed Chair Jerome Powell.

Analysts at JPMorgan, however, see a risk the Fed might not only add one more rate rise for this year but for 2019 as well. 

Any nod to four hikes would normally be considered as bullish for the U.S. dollar, yet the currency has shown scant correlation to interest rates in recent months, falling even as policy tightened.

Reasons cited by dealers include concerns about the U.S. budget and current account deficits, political chaos at the White House, better growth in competing countries, particularly Europe, and the risk of a U.S.-led trade war.

Trade will be top of the agenda at a two-day G20 meeting starting later on Monday in Buenos Aires and any signs of escalating stress between the U.S. and China could make investors in Asia nervous.

The cautious mood was evident in demand for the safe-haven Japanese yen which was climbing against a raft of currencies, including the euro and Australian dollar.

On Monday, the U.S. dollar was off 0.3 percent at 105.69 yen JPY= and not far from its recent trough at 105.24.

The dollar was a fraction firmer against a basket of currencies at 90.303 .DXY, while the euro eased 0.2 percent to $1.2264 EUR=.

The prospect of higher U.S. interest rates was been a burden for non-yielding gold, which slipped 0.8 percent last week. Early Monday, the metal XAU= was down at $1,311.20 per ounce.

Asian shares mixed: yen firm

Asian Stock Markets

Asian share markets traded mixed on Monday as caution gripped investors in a week in which the Federal Reserve is likely to hike U.S. interest rates and perhaps signal that as many as three more lie in store for the rest of the year.

Japan's Nikkei .N225 extended early losses to drop 0.9 percent as exporters were undermined by recent broad-based strength in the yen.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.35 percent, but China .CSI300 managed to eke out some gains.

The guarded mood was not confined to Asia, with the June contract for E-Minis futures on the S&P 500 ESc1 down 0.3 percent and FTSE futures FFIc1 off 0.2 percent.

While Wall Street had bounced on Friday, the major indices still ended lower for the week. The Dow .DJI lost 1.57 percent, the S&P .SPX 1.04 percent and the Nasdaq .IXIC 1.27 percent.

The decline was somewhat surprising given figures from Bank of America Merrill Lynch showed a record $43.3 billion of inflows into equities last week, outpacing bond flows for the first time since 2013.

For the year so far, $9.8 billion has gone into tech stocks and $7.3 billion into financials, while $41 billion has flowed into emerging markets and $31 billion into Japan.

Whether the cash continues to flow could depend on what the Fed decides on Wednesday. All 104 analysts polled by Reuters expected the Fed would raise rates to between 1.5 percent and 1.75 percent on Wednesday.

They were less certain on whether the “dot plot” forecasts of committee members will stay at three hikes this year or shift higher.

It will also be the first press conference for new Fed Chair Jerome Powell.

Analysts at JPMorgan, however, see a risk the Fed might not only add one more rate rise for this year but for 2019 as well. 

Any nod to four hikes would normally be considered as bullish for the U.S. dollar, yet the currency has shown scant correlation to interest rates in recent months, falling even as policy tightened.

Reasons cited by dealers include concerns about the U.S. budget and current account deficits, political chaos at the White House, better growth in competing countries, particularly Europe, and the risk of a U.S.-led trade war.

Trade will be top of the agenda at a two-day G20 meeting starting later on Monday in Buenos Aires and any signs of escalating stress between the U.S. and China could make investors in Asia nervous.

The cautious mood was evident in demand for the safe-haven Japanese yen which was climbing against a raft of currencies, including the euro and Australian dollar.

On Monday, the U.S. dollar was off 0.3 percent at 105.69 yen JPY= and not far from its recent trough at 105.24.

The dollar was a fraction firmer against a basket of currencies at 90.303 .DXY, while the euro eased 0.2 percent to $1.2264 EUR=.

The prospect of higher U.S. interest rates was been a burden for non-yielding gold, which slipped 0.8 percent last week. Early Monday, the metal XAU= was down at $1,311.20 per ounce.

Asian stocks slid followed by US political Scenario

Asian Stock Markets

Asian stocks slid on Friday as reports of more chaos in the Trump administration tested investors’ nerves, already frayed by fears that U.S. tariffs could hurt the global economy and trigger a trade war.

European stock futures point to a weaker start in Europe, with futures of Britain's FTSE FFIc1.FTSE and France's Cac FCEc1 down 0.1 percent. 

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.2 percent in early trade. Japan's Nikkei .N225 was down 0.6 percent. 

On Wall Street, the S&P 500 .SPX edged 0.08 percent lower on Thursday, marking its first four-day losing streak of 2018. The Nasdaq Composite .IXIC dropped 0.2 percent. 

U.S. shares hit a session low soon after the New York Times reported that U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to U.S. President Donald Trump’s businesses. 

The Washington Post, meanwhile, reported that President Donald Trump has decided to remove H.R. McMaster as his national security advisor. 

The news came just days after following the recent departure of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration. 

The developments, together with the report earlier this week that Trump is seeking to impose tariffs on up to $60 billion of Chinese imports, cemented investor concerns that the administration is increasingly leaning towards protectionism. 

White House trade adviser Peter Navarro has said that Trump would in coming weeks get options to address China’s “theft and forced transfer” of American intellectual property as part of the investigation under Section 301.

Fears that the tariffs could disrupt synchronised global growth dwarfed recent strong economic data, including a fall in U.S. jobless claims. 

Any disruptions to the information sector will cost investors particularly dearly given the sector has been the main engine of the global share rally during the past decade. 

U.S. Treasuries yield stood little changed at 2.822 percent US10YT=RR in Asia after having hit a near two-week low of 2.797 percent on Thursday. 

In contrast, short-term bond yields rose as investors braced for a widely expected rate hike by the Federal Reserve next week, with the two-year yield hitting a 9 1/2-year high of 2.295 percent US2YT=RR.