Stocks in Asia Trade Mixed; Yuan Stable After Drop: Markets Wrap

Publikuota: 2018-07-25
People look at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018. REUTERS/Aly Song
People look at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018. REUTERS/Aly Song
 

Stocks in Asia traded mixed Wednesday, with Chinese equities stalling after a three-day rally propelled by signs of a shift toward stimulus. The yuan was little changed after dropping to the weakest against the dollar in more than a year Tuesday.

Equity benchmarks in Tokyo and Hong Kong gained, while shares fell in Sydney and Shanghai. Futures on European equity indexes declined. The yen and Japanese bond yields were little changed after the Bank of Japan refrained from scaling back its bond purchases at a regular operation Wednesday, following speculation officials may consider tweaking their stimulus policy.

Ten-year Treasury yields dipped to 2.94 percent. Group of 10 currencies stayed in a range as investors await developments that include a Wednesday meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump to discuss tariffs on European car imports.

The rally in Chinese equities paused after the Shanghai Composite on Tuesday ratcheted up its biggest three-day gain in more than two years. China’s moves to shore up growth amid the rumbling trade war have helped to improve sentiment in its beaten-down equity market.

More earnings will roll in around the world, while the path of monetary policy is also in focus as the European Central Bank meets to decide interest rates.

“What we are seeing right now is positive earnings news on the back of fairly positive tax cuts and that is encouraging momentum in terms of economic growth,” Greg Daco, New York-based head of U.S. macro economics at Oxford Economics Ltd., told Bloomberg TV. “But we have to be wary that these tariffs have only gradually started to be implemented.”

Elsewhere, Australia’s dollar fell against all its G-10 peers after inflation data missed estimates, backing the case for the central bank to keep interest rates at a record low. Sterling held on to gains triggered by Prime Minister Theresa May taking control of Brexit talks, relegating her Brexit Department. Oil ticked up on stockpile decreases.

Here are some key events coming up this week:

Earnings season continues with the following tech companies among those reporting: Facebook, Amazon.com, Twitter, Advanced Micro Devices, Qualcomm and Intel. They are joined by global financial giants Deutsche Bank, Nomura and Visa. Others include Nissan and Shell. Pakistan holds national elections Wednesday. The European Central Bank’s policy decision is Thursday. U.S. gross domestic product probably increased by about 4.2 percent at an annualized rate in the second quarter, the most since 2014, economists forecast ahead of Friday’s data.

These are the main moves in markets: Stocks

Japan’s Topix index rose 0.4 percent at the 3 p.m. close in Tokyo. Hong Kong’s Hang Seng gained 0.7 percent. The Shanghai Composite fell 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.3 percent. South Korea’s Kospi index lost 0.3 percent. Futures on the S&P 500 Index dipped 0.2 percent. The underlying gauge rose 0.5 percent Tuesday. Futures on the FTSE 100 dropped 0.2 percent.

Currencies

The yen was little changed at 111.18 per dollar. The offshore yuan held at 6.8026 per dollar. The Bloomberg Dollar Spot Index was flat. The euro was little changed at $1.1687. The British pound traded at $1.3152.

Bonds

The yield on 10-year Treasuries fell more than one basis point, to 2.94 percent. 10-year Japanese government bond yields were down about one basis point at 0.065 percent after a rare surge on Monday. The yield on Australian 10-year bonds fell about 4 basis points to 2.68 percent.

Commodities

West Texas Intermediate crude rose 0.4 percent to $68.76 a barrel. Gold rose 0.2 percent to $1,226.71 an ounce. The Bloomberg Commodity Index increased 0.3 percent.

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