Asian markets cautiously higher after Wall Street earnings
Asian indexes were cautiously higher on Thursday, following key earnings on Wall Street and as oil prices came off two-week lows set earlier in the session.
Oil prices recouped some losses after falling to a two-week low, down nearly 4 percent, following an unexpected build in U.S. gasoline inventories and an increase in U.S. crude production. Brent crude was up by 0.72 percent to trade at $53.31 a barrel while U.S. crude rose 0.65 percent at $50.77.
Investors are also expected to eye politics in Europe as tensions on the Korean peninsula appear to ebb, following news that a U.S. aircraft carrier group had not actually been headed to seas near the Korean Peninsula.
The first round of the tight French presidential election this weekend could influence movements in euro/dollar, said IG Chief Market Strategist Christ Weston in a Thursday morning note. Centrist Emmanuel Macron and far-right candidate Marine Le Pen, who advocates leaving the euro zone, are most likely to go through to the second round of the election, he added.
“(I)t seems unlikely euro/dollar will break the $1.05 to $1.085 range on this outcome. I would however favor euro appreciation here and a brief rally in the CAC 40 cash, given the polls have consistently shown an easy win for Macron,” Weston said. Euro/dollar last traded at $1.0713.
Japan’s benchmark Nikkei 225 index climbed 0.31 percent and the Kospi rose 0.32 percent. The ASX 200 ticked higher by 0.19 percent.
But markets in greater China were narrowly mixed. The Shanghai Composite eased 0.09 percent lower while the Shenzhen Composite traded nearly flat. The Hang Seng Index bucked the trend and rose 0.3 percent.
A spokeswoman for China’s forex regulator said on Wednesday that cross-border capital flows had eased in Q1 this year.
Meanwhile, the dollar rose from around three-week lows to trade at 99.79 against a basket of rivals at 11:10 am HK/SIN. The greenback was also slightly stronger against the yen, trading higher at 108.96 compared to the 108.4 handle seen yesterday.
Sterling gave up some gains after rising to a six-and-a-half month high following the announcement of a snap election by Prime Minister Theresa May on Tuesday. Cable traded at $1.2784, just off the $1.28 handle seen Wednesday.
Commenting on sterling, Port Shelter Investment Management Chief Executive Richard Harris told CNBC that the currency had been “due for a bounce” but is unlikely to strengthen further. “I don’t really see it moving much more from here. There’s still too much uncertainty out there,” he added.
The Jakarta Composite was slightly higher today, trading higher by 0.15 percent after incumbent governor Basuki Tjahaja Purnama, commonly referred to as Ahok, ceded ground in the Jakarta gubernatorial election to challenger Anies Baswedan, a former education minister.
Shares of Saratoga Investama Sedaya registered a bounce of 23.6 percent. Sandiaga Uno, who co-founded the investment company, is the running mate of Anies Baswedan. Meanwhile, shares of property developer Agung Podomoro Land tanked by eight percent.
In corporate news, Rio Tinto reported that iron ore production fell three percent on year but did not change its full-year guidance. Rio Tinto shares jumped one percent in early trade.
On the economic front, Japan reported that March exports rose 12 percent on year, against a 6.7 percent increase projected. This is the fourth consecutive month of gains for Japanese exports, Reuters said.
Japanese Finance Minister Taro Aso said on Wednesday there would be “various problems” if the Bank of Japan resorted to helicopter money as this would undermine its independence.
Also on the calendar is the Indonesian central bank’s rate decision at 5:00 p.m. in Jakarta. It is widely expected to keep rates on hold.
Stateside, stocks closed mostly lower on the back of a mixed earnings picture and lower oil prices, with the Dow Jones industrial average down 0.58 percent or 118.79 points after IBM announced mixed Q1 earnings, to finish at 20,404.49.
In its Beige Book report released on Wednesday, the U.S. Federal Reserve indicated that the labor market was tightening but that inflationary pressures remained modest.
Source: CNBC
