Asia stock markets mostly surge; Mexican peso strengthens after conclusion of US Presidential debate

Asian stock markets were mostly higher in late-morning trade Thursday and the Mexican peso strengthened against the dollar following the conclusion of the final U.S. Presidential debate.

The Mexican peso, which has been closely watched in the election cycle, strengthened to as high as 18.44 against the greenback from levels near 18.51 before the start of the debate. Earlier this week, the currency pair traded over 19.00.

“The Mexican Peso recovered its losses against the dollar and this is traders showing their decision that [Republican nominee Donald Trump has yet lost another debate,” said Naeem Aslam, chief market analyst at ThinkMarkets, in a note.

U.S. Presidential nominees Donald Trump and Hillary Clinton debated on a range of topics from Russian involvement in election hacks to immigration and the appointment of Supreme Court justices in a session moderated by Chris Wallace of Fox News.

Aside from the debate, it was a relatively data-light session in the region, though employment numbers in Australia came in lower than expected.

Data from the Australian Bureau of Statistics showed that in September, the total number of jobs decreased by 9,800, widely missing a Reuters poll that predicted an increase of 15,000 jobs, as full-time employment fell, while part-time employment rose. At the same time, the unemployment rate also fell by 0.1 percentage-point on-month to 5.6 percent and the labor-force participation rate dropped.

“The net effect of all these factors has been a slight increase in the implied probability of a November rate cut to 19 percent, as priced in the swaps market,” said Chris Weston, chief market strategist at spreadbettor IG, in a note.

“Personally, I don’t think this employment report will push the Reserve Bank of Australia to think more seriously about further rate cuts, but there’s no doubt it’s a poor number,” Weston said, adding things could get interesting if the third-quarter inflation report due next week turned out weak.

The Australian dollar dropped from a session high of $0.7734 to as low as $0.7680 after the report.

The benchmark ASX 200, however, traded up 0.23 percent, with the energy sector and the materials sector both advancing 1.19 percent as of 11:37 a.m. HK/SIN.

Other Asian markets traded mostly higher. In Japan, the Nikkei 225 climbed 1.13 percent, while the Topix index gained 0.81 percent. Across the Korean Strait, the Kospi was flat at 2,041.17. Hong Kong’s Hang Seng index was up 0.61 percent. Chinese mainland shares were mixed, with the Shanghai composite down 0.11 percent and the Shenzhen composite up by 0.16 percent.

Investors in Australia assessed key resource producers for their quarterly production numbers.

Global miner Rio Tinto announced before the market open that it lowered its 2016 guidance for iron ore shipments to between 325 million and 330 million tons, compared with an earlier guidance of around 330 million tons, citing a reduction in shipments due to port and rail maintenance.

Its third quarter 2016 shipment of iron ore came in 80.9 million tons, which was down 5 percent on-year and down 2 percent on-quarter.

Rio Tinto shares, however, were up 0.56 percent in afternoon trade. Shares of other major miners were mixed, with Fortescue down 1.17 percent and BHP Billiton up 2.14 percent.

In Japan, shares of gaming giant Nintendo climbed 3.2 percent to 26,915 yen a share, after the company teased on social media that it would offer a glimpse of its upcoming NX gaming console to the public later in the global day.

Shares of Nikkei index heavyweights Fast Retailing, which owns the clothing chain Uniqlo, were up 3.51 percent, while SoftBank, which recently announced a tie-up with Saudi Arabia to set up a $100 billion investment fund to invest in the technology sector, gained 1.59 percent.

Sharp shares were up 6.41 percent. On Thursday morning, the Japanese business daily Nikkei reported, citing sources, that Foxconn, which controls a majority stake in Sharp, was trying to expand into the semiconductor industry by partnering with SoftBank-owned ARM to create a chip design center in Shenzhen.

The Nikkei report added that ARM, Foxconn and SoftBank all declined to comment.

Oil prices pulled back slightly during Asian hours, after advancing in the U.S. session following government data stateside that showed a surprising drawdown in inventory.

Data from the U.S. Energy Information Administration showed crude stocks fell 5.2 million barrels in the week ended October 14, shattering market expectations for a 2.7-million barrel build, Reuters reported.

Global benchmark Brent was down 0.17 percent at $52.58 as of 11:44 a.m. HK/SIN, after climbing 1.9 percent overnight. U.S. crude futures fell 0.35 percent to $51.42 a barrel, following a 2.6 percent gain in the U.S. session. The front-month November contract for U.S. crude is set to expire following Thursday’s session.

In the U.S., the Dow Jones industrial average rose 40.68 points, or 0.22 percent, to 18,202.62; the S&P 500 index advanced 4.69 points, or 0.22 percent, to end at 2,144.29, while the Nasdaq rose 2.58 points, or 0.05 percent, to 5,246.41. Among companies reporting earnings, Morgan Stanley, Abbott Labs and BB&T beat their earnings per share and revenue expectations.

On Wednesday, the Federal Reserve released its latest iteration of the so-called Beige Book, which summarizes economic conditions in the country. In it, the Fed said economic activity in the U.S. rose at a modest pace in most regions.

 Source: CNBC