Europe shares rise on earnings, Asian bonds gains

Tokyo - European shares climbed as Societe Generale jumped after its earnings report, while Chinese shares in Hong Kong soared to a 14-month high.

Political uncertainty continued to dominate markets, with Asian bonds following a rally in Treasuries.

Banks paced gains as the Stoxx Europe 600 index rose for a third day. Yields on 10-year Australian bonds retreated following the longest stretch of declines in Treasury yields since the lead up to June’s Brexit vote.  

Chinese shares traded in Hong Kong jumped for a fourth day as investors sought out bargains in one of the world’s cheapest equity markets.

The New Zealand dollar slid after the central bank signalled discomfort with the currency’s strength and odds of an interest-rate increase were lowered.

Trades sparked by Donald Trump’s election continued to fluctuate as long-awaited details on pro-growth policies remain undelivered. The yen, gold and global equities have alternated between gains and losses for the past four days.

Total raised its dividend as profit beat estimates, while Societe Generale’s earnings benefited from strong results from French consumer banking. New Zealand’s central bank expressed concern about the international outlook as it left interest rates unchanged.

"With the yen acting erratically, it’s difficult for investors to tilt their positions too much in one direction," said Shunichi Otsuka, general manager of research and strategy at Ichiyoshi Securities Company in Tokyo.

BlackRock’s chief executive Laurence D. Fink said on Wednesday that businesses are in a "slow down" because of uncertainty about whether Congress and the new US administration will enact policies that energized markets after the election.

What’s coming up in the markets:

A US court of appeals is reviewing arguments on whether to reinstate the Trump administration’s temporary ban on immigration, with the outcome likely to be appealed to the Supreme Court.

The US Treasury Department is this week selling a total of $62bn of three-, 10- and 30-year securities in its quarterly refunding. Japanese Prime Minister Shinzo Abe travels to Washington on Friday to meet with US President Donald Trump.

Here are the main market moves:

Bonds

Yields on 10-year bonds in Italy and Spain dropped three basis points, while those in France were little changed.

Australian 10-year bonds rose for a fourth day, driving yields down five basis points to 2.64%, the lowest since November. Yields in New Zealand were down 10 basis points at 3.16%.

Treasuries fell, with 10-year yields rising two basis points to 2.36%, after reaching a three-week low on Wednesday based on closing levels.

Currencies

The dollar rose against most major currencies. The Bloomberg Dollar Spot Index was little changed, heading for its first weekly gain of the year.

The yen slipped 0.4% to 112.40 per dollar after rising 0.4% on Wednesday. The euro lost 0.1% to $1.0691, heading for its steepest weekly decline in two months.  

The kiwi dollar slid 0.8%, extending its drop after Reserve Bank of New Zealand Governor Graeme Wheeler said "a decline in the exchange rate is needed." The Australian dollar lost 0.2%.

Stocks

The Europe Stoxx 600 climbed for a third day, adding 0.5%. Societe Generale added 1.8%. The Hang Seng China Enterprises Index jumped 1.2%. The gauge has soared 4.1% over the past four sessions.

MSCI Asia Pacific Index lost 0.4%, after closing on Wednesday at the highest level since July 2015.

The Topix slid 0.7%, with automakers and appliance makers falling the most. Futures on the S&P 500 were little changed after the index edged up 0.1% on Wednesday.

Commodities

Oil rose 0.8% to $52.76 per barrel. The global oil market’s march to equilibrium won’t be deterred by the increasing volume of crude being poured into US storage tanks, according to Goldman Sachs Group.

Copper three-month forwards fell 0.5%. The metal jumped 1.7% on Wednesday after workers at the biggest mine in Chile vowed to strike.

Goldman Sachs Group forecast what would be the first deficit of the metal since 2011. Gold was flat at $1 241.65 an ounce, after touching the highest level since November on Wednesday.