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Asian Stocks Head for the Best Week Since February: Markets Wrap

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(Bloomberg) — Asian stocks rallied after their U.S. counterparts gained amid relief the latest reading on American inflation suggested less need for the Federal Reserve to accelerate monetary tightening. The dollar steadied after dropping the most since March.

The MSCI Asia Pacific Index is heading for its best week since February thanks to easing investor concerns that higher U.S. yields and a stronger dollar would spur broad contagion. Equity benchmarks advanced across most of the region, with Japan’s Topix heading for its highest close in 10 weeks. Malaysian assets trading offshore began to stabilize after the shock election win for the opposition. Ten-year Treasury yields held below 3 percent.

Investors took solace in U.S. consumer price data that rose less than forecast and showed costs for big-ticket items such as automobiles and airfares declined last month. A gauge of American small-cap stocks set a record.

“The market is breathing a sigh of relief that there was not an upside surprise to the inflation stats,” Peter Boockvar, the chief investment officer of Bleakley Financial Group, wrote in an email to clients.

Weaker than anticipated data in the U.K. spurred a less-hawkish tone from the Bank of England policy meeting Thursday, sending the pound down to its weakest since January. In Asia, geopolitics remains in focus, with the summit between U.S. President Donald Trump and North Korea’s Kim Jong Un set for June 12 in Singapore. Oil is heading for a second week of gains after Trump pulled out of the Iran nuclear deal, and in New York is trading above $71 a barrel.

Terminal users can read more in our markets live blog.

As the week draws to a close, here’s a look at some potential focal points for investors:

  • Hong Kong releases GDP data Friday.
  • India reports on industrial production.
  • The University of Michigan gauge of consumer sentiment is due.

And these are the main moves in markets:

Stocks

  • Japan’s Topix index rose 0.5 percent as of 12:57 p.m. in Tokyo.
  • Australia’s S&P/ASX 200 was up 0.1 percent.
  • Hang Seng rose 1.4 percent, set for the highest level since March 21.
  • Futures on the S&P 500 were little changed after the underlying gauge closed up 0.9 percent.
  • The Kospi advanced 0.6 percent.
  • The MSCI Asia Pacific Index is heading for a weekly gain of 1.9 percent, and the MSCI Emerging Markets Index is heading for a 2.6 percent advance on the week.

Currencies

  • The Bloomberg Dollar Spot Index was little changed after sinking 0.6 percent Thursday, practically erasing its gain for the week.
  • The Japanese yen was little changed at 109.40 per dollar.
  • The euro was also flat, at $1.1915, and is heading for a fourth week of declines.

Bonds

  • The yield on 10-year Treasuries was at 2.96 percent after sliding 4 basis points Thursday.
  • Australia’s 10-year yield was at 2.77 percent.

Commodities

  • West Texas Intermediate crude was at $71.35 a barrel, up more than 2 percent for a second straight week.
  • Gold was ticked lower to $1,319.91 an ounce after gaining 0.7% on Thursday.
  • LME copper traded at $6,909.00 per metric ton.

To contact the reporter on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Ravil Shirodkar

©2018 Bloomberg L.P.

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