Stocks in Asia Fluctuate as Earnings, ECB in Focus: Markets Wrap

Francois Lenoir („REeuters“/„Scanpix“) nuotr.

Stocks in Asia were mixed following the biggest declines in seven weeks on Wall Street as uneven corporate earnings keep traders on edge ahead of reports from technology giants, banks and a European Central Bank meeting. The dollar extended losses against G10 peers.

Electronics companies and machinery makers underpinned modest gains on Japan’s Topix index after Fanuc Corp. and Hitachi Construction Machinery Co. raised their full-year operating forecasts. South Korea’s won rose to a two-month high after economic growth beat estimates, while Mexico’s peso came under pressure after comments from U.S. President Donald Trump on terminating Nafta. Ten-year Treasury yields were steady after reaching their highest since March, and gold rose as investors sought havens from slumping equity markets.

Investors are assessing earnings and economic data for indications of broadening growth that may sustain gains in global equities and higher bond yields, even as the Federal Reserve and other central banks start to wind back stimulus.

The ECB is expected to announce a reduction in the size of its monthly bond buying at its policy meeting Thursday, the biggest scheduled event for markets this week. U.S. orders for business equipment increased more than forecast in September, pointing toward economic growth for the quarter.

The S&P 500 Index fell for the second time this week, with weak results hammering shares in Chipotle Mexican Grill Inc. and Advanced Micro Devices Inc. Twitter Inc. and Mattel Inc. unveil earnings on Thursday with Amazon.com Inc., Google parent Alphabet Inc. and Microsoft Corp. still to come. Before that investors get a look at bank profits from China Construction Bank Corp., Barclays Plc and Deutsche bank AG.

In the latest development on who the next Fed chair will be, U.S. President Donald Trump seems to have ruled out National Economic Council Director Gary Cohn. An announcement is imminent with Trump expected to name the next Fed head before Nov. 3.

South Korea’s economic growth picked up more than expected in the third quarter, with GDP expanding 3.6 percent year-on-year and 1.4 percent quarter-on-quarter, which was the fastest pace since the second quarter of 2010. Estimates were for 3 percent and 0.9 percent, respectively.

Meanwhile, China began marketing its first sovereign dollar bonds since 2004 on the heels of the twice-a-decade Communist Party congress at which investors looked for new clues on policies for sustaining growth and implementing pro-market reforms.

These are some of the key events coming up:

Hong Kong reports on imports and exports on Thursday, while Japan updates on CPI Friday. The U.S. economy probably expanded at about a 2.5 percent annualized pace in the third quarter, restrained in part by the effects of two hurricanes, economists forecast the government to report on Friday. Norway’s Norges Bank and Sweden’s Riksbank rate decision on Thursday.

And here are the main moves in markets: Stocks

Japan’s Topix index rose 0.2 percent as of 2:14 p.m. in Tokyo, while the Nikkei 225 Stock Average rose 0.3 percent. Australia’s S&P/ASX 200 Index swung between gains and losses before closing up 0.2 percent. South Korea’s Kospi index was flat. The Hang Seng Index in Hong Kong was little changed. The Shanghai Composite Index gained 0.5 percent. Futures on the S&P 500 Index were flat. The underlying measure fell 0.5 percent on Wednesday as did the Dow Jones Industrial Average.

Currencies

The Bloomberg Dollar Spot Index lost 0.1 percent, extending a 0.2 percent decline on Wednesday, down for the first day in four. The yen climbed 0.2 percent to 113.52. The won rose 0.3 percent to 1,124.54 per dollar. The euro added 0.1 percent to $1.1827 after gaining 0.4 percent on Wednesday. The Mexican peso fell following the Nafta comments before rebounding. The British pound traded at $1.3271 after jumping 1 percent on Wednesday as accelerating U.K. growth spurred bets on higher borrowing costs.

Bonds

The yield on 10-year Treasuries fell one basis point to 2.42 percent. It touched 2.47 percent, the highest level in seven months. Australia’s 10-year bond yield was steady at 2.76 percent.