Stocks Recover After Trade List Angst; Yen Falls: Markets Wrap

Publikuota: 2018-07-12 09:30
A screen displays stock board information at a securities company in Hanoi, Vietnam July 6, 2018. Picture taken July 6, 2018.  REUTERS/Kham
A screen displays stock board information at a securities company in Hanoi, Vietnam July 6, 2018. Picture taken July 6, 2018. REUTERS/Kham
 

Asian stocks rose Thursday after a bruising selloff the previous day, despite lingering concerns around the U.S. and Chinese trade war that show little sign of abating. The yen declined and crude oil steadied after its biggest plunge in two years.

Stock markets from Sydney to Hong Kong climbed alongside U.S. and U.K. equity futures, paring some of Wednesday’s losses that were spurred by angst the Trump administration’s trade stance will weaken the growth outlook. Chinese stocks outperformed. Asian currencies were under pressure amid nervousness surrounding the U.S.-China dispute. Oil steadied after a slide, while 10-year Treasury yields ticked higher. The offshore yuan pared an overnight loss, though remained past a key level against the greenback that prompted verbal intervention from the central bank last week.

Traders continue to deal with the possibility of a further escalation in the dispute between the world’s two largest economies and the impact that quarrel could have on global growth. Washington and Beijing now have about seven weeks to strike a deal or dig in for a trade war that could upend corporate supply chains and raise prices for consumers. High-level trade talks between the pair were said to have ground to a halt, just as investors were poised to turn their focus to corporate-earnings season and growth in the economy.

“Until you get resolution of the trade talks you’re going to see international markets will underperform relative to the U.S.,” said Kevin Nicholson, chief market strategist at RiverFront Investment Group in Richmond, Virginia. The S&P 500 Index will probably trade between 2,600 and 2,800, with support from earnings growth and headwinds from trade tensions, he said. “Commodities are going to be a loser” in the trade war, and RiverFront has cut back its exposure, he said.

Elsewhere, Turkey’s lira hit a record low as a local television channel said President Recep Tayyip Erdogan sees the exchange rate and interest rates falling amid uneasiness about his tightening grip over the central bank. The won fell, with little reaction to the Bank of Korea holding its benchmark rate at 1.5 percent.

These are some events to look out for this week:

Earnings season gets into gear with JPMorgan Chase & Co. and Citigroup Inc. among the largest companies due to give results, as well as India’s Infosys Ltd. The most noteworthy U.S. data may be the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said.

And here are the main market moves: Stocks

The MSCI Asia Pacific Index added 0.3 percent as of 2:03 p.m. Tokyo time. Topix index rose 0.6 percent. Hong Kong’s Hang Seng Index advanced 0.9 percent. The Shanghai Composite added 2.1 percent. Kospi index gained 0.6 percent. Australia’s S&P/ASX 200 Index climbed 0.9 percent. Futures on the S&P 500 rose 0.3 percent.

Currencies

The Bloomberg Dollar Spot Index slipped 0.1 percent. The Japanese yen fell 0.2 percent to 112.21 per dollar, hitting the weakest since January. The euro rose 0.1 percent to $1.1682. The offshore yuan rose 0.3 percent to 6.7043 per dollar.

Bonds

The yield on 10-year Treasuries rose one basis point to 2.86 percent. Australia’s 10-year yield increased two basis points to 2.63 percent.

Commodities

West Texas Intermediate crude rose 0.6 percent to $70.82 a barrel. Gold rose 0.2 percent to $1,244.56 an ounce. LME copper increased 0.8 percent to $6,191 per metric ton.

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