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Asia stock are mixed as euro gains, bonds steady

Jan 12 2018 07:29
Adam Haigh, Bloomberg

Sydney - Asian stocks are set to end the week on diverging paths as Japanese shares declined, while those in Hong Kong extended a record winning streak.

Volatility in the Treasuries market subsided and the euro extended its advance.

Equities rose in most Asia-Pacific markets with above-average volumes in Hong Kong and South Korea, while a stronger yen weighed on Japanese stocks.

The euro was boosted by signals from the European Central Bank the economy may be strong enough to warrant scaling back crisis-era guidance on stimulus.

The ECB release was the latest in a series of communications from central banks that have started waking currency markets up from a low-volatility stupor.

Treasuries steadied after a sell-off sparked by rising concerns on inflation and potential rollback of purchases by China.

Attention turns to the earnings season, with investors hoping results from JPMorgan Chase & Company and Wells Fargo & Company  can boost optimism in the expansion of American corporate profits.

The broad-based gains in equities this year are building on 2017’s stellar run amid optimism in global growth, though leading some to question valuations.

An exchange-traded fund tracking Brazilian equities dropped in after-hours US trading after S&P Global Ratings cut Brazil’s sovereign credit rating deeper into junk territory.

Here are some key events and data releases scheduled for the remainder of this week:

US inflation data are forecast to show price pressures remain muted for now, giving hawks little reason to argue for faster tightening. JPMorgan and BlackRock are among four financial firms reporting results on Friday.

China’s export growth probably slowed somewhat, to 10.8% in December from November’s 12.3%, forecasts ahead of data on Friday show. Imports are expected to climb 15.1%, with the trade surplus narrowing to $37bn.

And these are the main moves in markets:

Stocks

Japan’s Topix index fell 0.5% as of 1:38pm in Tokyo. 7-Eleven store owner Seven & I Holdings declined with FamilyMart UNY Holdings Company after reporting results. Fast Retailing surged 6.3% after profit topped estimates, curbing losses in the Nikkei 225 index to less than 0.1%.

Futures on the S&P 500 were little changed after the underlying gauge rose 0.7% on Thursday. Hong Kong’s Hang Seng Index rose 0.3% and Australia’s S&P/ASX 200 Index added 0.1%.

Gauges in India, Singapore, Malaysia and Taiwan also climbed, while South Korea’s Kospi was flat.  The MSCI Asia Pacific Index rose 0.1%, up almost 4% since the year began.

The MSCI All-Country World Index added 0.4% on Thursday, closing at an all-time high. It’s up 3.3% this year after a 22% surge in 2017.

Currencies

The euro rose 0.1% to $1.2048 after climbing 0.7% on Thursday. The Bloomberg Dollar Spot Index fell 0.1%. The pound added 0.1% to $1.3550. The Korean won climbed 0.8% to 1 063.94 per dollar.

Bonds

The yield on 10-year Treasuries was steady at 2.55%, up about seven basis points for the week. Australia’s 10-year yield rose about one basis point, to 2.75%.

Commodities

West Texas Intermediate crude slid 0.3% to $63.62 a barrel, while Brent was flat at $69.28 after briefly topping $70. Gold futures advanced 0.6% to $1 329.86 an ounce, on course for a fifth weekly gain.

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equities  |  markets  |  asian markets

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