Asian markets track European losses, strong yen hits Nikkei

Asian Stock Markets

Asian shares were mostly lower Tuesday, tracking losses in Europe, where investor confidence was sapped by political uncertainty in Italy. U.S. markets were closed Monday for a holiday.

Japan’s Nikkei 225 fell 0.6 percent to finish at 22,358.43 while South Korea’s Kospi lost 0.9 percent to 2,457.25. Hong Kong’s Hang Seng index fell 0.9 percent to 30,519.29.

The Shanghai Composite Index retreated 0.5 percent to 3,120.46. Australia’s S&P/ASX 200 added 0.2 percent to 6,013.60. Stocks in Taiwan and the Philippines were lower. Many Southeast Asian markets were closed for holidays.

Italy’s president vetoed a euroskeptic candidate for economy minister proposed by leaders of two populist parties that were trying to form a government. President Sergio Mattarella said Sunday he was refusing to appoint Paolo Savona, whose policies could rattle nervous markets and further inflate the country’s staggering debt load.

Instead, he named an economist, Carlo Cottarelli, to lead the country until new elections. While avoiding a populist government that investors had worried about, the move means more political uncertainty.

Diplomacy accelerated Tuesday ahead of a potential summit between President Donald Trump and North Korean leader Kim Jong Un as a team of American diplomats involved in preparatory discussions left a Seoul hotel, possibly to continue talks with their North Korean counterparts.

In Beijing, South Korea’s Yonhap news agency reported that senior North Korean official Kim Yong Chol planned to head to the United States. He would be the most senior North Korean official to visit the United States in 18 years.

Benchmark U.S. crude plunged $1.12, or 1.7 percent, to $66.76 per barrel in electronic trading on the New York Mercantile Exchange.

The contract settled at $67.88 per barrel, down $2.83, on Monday. It dropped 4 percent on Friday, battered by reports that OPEC countries and Russia could start pumping more oil soon. Brent crude, used to price international oils, added 19 cents to $75.51 per barrel in London.

The dollar slipped to 108.92 yen from 109.42 yen while the euro fell to $1.1593 from $1.162.

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.

Asian stocks supported by corporate earnings that quell concerns about the surge in U.S. bond yields.

Asian stocks were supported on Thursday by robust corporate earnings that helped Wall Street quell concerns about the surge in U.S. bond yields. However, sagging Chinese shares limited the upside potential of the market. 

Spreadbetters expected European stocks to open higher off the back of firm U.S. stocks, pointing to a rise in Britain’s FTSE of 0.1 percent, an increase in Germany’s DAX of 0.4 percent and in France’s CAC of 0.4 percent.

The dollar hovered near 3-1/2-month highs against a basket of currencies, supported by the rise in U.S. long-term debt yields to a four-year peak.

South Korea’s KOSPI climbed 1.3 percent, with tech shares buoyed by news of a record quarterly profit from Samsung Electronics.

The region’s other gainers included Japan’s Nikkei, which rose 0.5 percent and Thai and Malaysian stocks.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.15 percent, as weaker Chinese stocks weighed on the market.

The benchmark Shanghai Composite Index fell 0.9 percent and the blue-chip CSI300 index dropped 1.4 percent as tech shares came under pressure following news that U.S. prosecutors have been investigating if China’s Huawei violated U.S. sanctions on Iran.

The Dow Jones Industrial Average rose 0.25 percent on Wednesday, ending five consecutive sessions of losses, and the S&P 500 gained 0.18 percent on optimism over a spate of upbeat earnings that managed to offset jitters about rising U.S. bond yields.

The rise in the 10-year U.S. Treasury yield to a four-year peak above 3 percent had weighed on stocks amid concerns higher costs to borrow could dampen corporate profits.

Nonetheless, the broader equity market reaction to the latest jump in U.S. yields appeared to be more measured compared to February, when a similar spike in rates sent stocks tumbling.

“The equity markets slid sharply in January and March in response to the rise in Treasury yields. But the Federal Reserve signaled in March that its rate hikes would be gradual,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.


The 10-year yield rose to 3.035 percent on Wednesday, its highest since January 2014. The yield has climbed on expectations of a steady U.S. economic expansion, accelerating inflation and concerns about increasing debt supply. It last stood at 3.031 percent.

U.S. yields have dragged up their European counterparts, with 10-year German bund reaching a six-week high of 0.655 percent and its British Gilt equivalent setting a nine-week peak of 1.57 percent this week.

Asian shares ride metals gains, stronger Wall Street

Asian shares rose on Tuesday after modest gains on Wall Street, while robust metals prices underpinned some regional markets even as investors remained wary ahead of the annual central banking conference in Jackson Hole later this week. 

Futures suggested the brighter mood would carry through to Europe, with the Eurostoxx 50 up 0.4 percent, DAX futures up 0.5 percent and FTSE futures 0.4 percent higher. 

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.7 percent. 

On Wall Street on Monday, the Dow Jones Industrial Average and the S&P 500 marked modest gains, though the Nasdaq Composite edged down slightly. 

The Shanghai Composite Index advanced 0.1 percent while the blue-chip CSI300 index was up 0.2 percent. 

The MSCI Asia ex-Japan materials index was 1 percent higher, buoyed by recent spot price gains.

The Australian stock market got a helping hand from strong gains for global mining giant BHP Billiton, which reported a surge in annual underlying profit to $6.7 billion on Tuesday. 

Zinc edged down a day after hitting its highest since October 2007, while copper inched back toward its highest peak since November 2014 scaled on Monday. Nickel, used in stainless steel, crept slightly higher to log a fresh high for the year.

Nonetheless, Trinh cautioned that commodities have mostly firmed "on speculative Chinese investment flow from the wealth management industry, so we question the real demand."

South Korean shares added 0.5 percent, despite lingering worries about tensions on the Korean peninsula. 

The country's forces began computer-simulated military exercises with the United States on Monday, which Pyongyang has denounced as a "reckless" step toward a nuclear war.