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Sydney - Asian raw-material producers advanced after a surge in commodity prices bolstered optimism the global economy can gather momentum. Oil extended last week’s strongest rally this year.
BHP Billiton, Rio Tinto and Nippon Steel & Sumitomo Metal underpinned gains on the MSCI Asia-Pacific Index, which is on track to rise for a seventh month. Equity gauges from Tokyo to Sydney were mixed.
Oil added to gains from Friday, which came as inventories for crude and gasoline shrank.
Copper’s rally has further to go, Citigroup said last week after the metal reached a two-year high while top producer Chile raised its price forecasts.
Investors are assessing economic numbers from the world’s top three economies. China’s official factory gauge, the manufacturing purchasing managers index, slipped to 51.4 in July, compared to the 51.5 median forecast in a Bloomberg survey of economists and 51.7 in June, amid government efforts to curb financial risks.
The US economy expanded 2.6% in the second quarter, indicating the world’s largest economy is growing steadily. Meanwhile, Japan’s industrial output for June rose 1.6 percent from the previous month, rebounding amid solid global demand.
Asian stocks have rallied this year as evidence emerged of a resilient global economy. The MSCI Asia Pacific Index is set for a 3.7% gain in June, the biggest since January. It advanced 0.4% as of 2:16pm in Tokyo, with a sub-index of commodity producers up 1.3%, the biggest gain among industry groups.
Corporate earnings remain of interest, with Apple, Tesla, Berkshire Hathaway and Toyota Motor slated to unveil results throughout the week. HSBC Holdings’s second-quarter profit beat analysts’ estimates as outgoing chief executive officer Stuart Gulliver boosted revenue while also trimming costs and the lender said it will spend up to $2bn buying back stock.
Geopolitics are back in focus, after Russia ordered the US to slash staff at its diplomatic missions in the country in retaliation for new sanctions approved by Congress, while North Korea on Friday test-fired an intercontinental ballistic missile for the second time in weeks, threatening to sour relations between the US and China.
Here are some key events coming as the week gets going:
The Reserve Bank of Australia and the Reserve Bank of India both hold meetings this week. Thai current account data and factory output figures are due on Monday.
Here are some of the key moves in markets:
Stocks
Japan’s Topix index swung between gains and losses. Earnings that beat expectations from the likes of Hitachi and TDK were outweighed by a firmer yen against the dollar. Australia’s S&P/ASX 200 Index rose 0.7%. South Korea’s Kospi index lost 0.2%. Hong Kong’s Hang Seng Index added 1%.
HSBC was the biggest contributor to the advance as the stock jumped 2.5% to the highest intraday level since November 2014. The Shanghai Composite Index rose 0.7%.
Futures on the S&P 500 Index fell 0.1%. A bout of volatility last week sent the Nasdaq 100 Index lower and S&P 500 Index lower.
Currencies
The yen rose 0.2% to 110.49 per dollar, near Friday’s 1 1/2-month high, and the euro bought $1.1738. The Australian dollar was little changed at 79.84 US cents after last week hitting 80 cents. The Aussie rebounded from a brief dip following the latest China data.
The Bloomberg Dollar Spot Index rose 0.1% after declining 0.4% last week for a third week of retreats.
Bonds
The yield on 10-year Treasuries fell one basis point to 2.28%. 10-year Australian government notes were steady at 2.69%.
Commodities
West Texas Intermediate rose 0.3% to $49.88 after briefly testing above $50 a barrel for the first time since May. Copper climbed as much as 1.2% to $6 400 a metric ton, matching the intraday level reached last week.
Gold was little changed at $1 268.48 an ounce, set for a sixth month of gains in seven.
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