Stocks in Asia gain as US jobs data beat

Big 5

Most Asian indexes were in positive territory in Monday trade after U.S. jobs data beat expectations and as Chinese inflation data for June were in line.

The Nikkei 225 advanced 0.95 percent and South Korea’s benchmark Kospi index edged up 0.23 percent.

The S&P/ASX 200 gained 0.61 percent, led advances in the financials and information technology sub-indexes.

Markets in greater China were mixed. The Hang Seng Index was up 0.99 percent, but markets on the mainland traded lower. The Shanghai Composite was off by 0.21 percent and the Shenzhen Composite slipped 0.473 percent.

Markets in Thailand were closed for a public holiday.

June inflation data out of China was in line with expectations. The China consumer price index (CPI) gained 1.5 percent on-year and PPI rose 5.5 percent. Both figures were in line with forecasts from a Reuters poll.

The Australian dollar, which is sensitive to Chinese economic data, was largely unaffected by the headlines. The Aussie dollar gained later in the session to trade at $0.7610 by 11:44 a.m. HK/SIN, compared with the $0.7605 seen at the end of the Friday session. Japan core machinery orders in May dropped 3.6 percent on month, missing the 1.7 percent rise forecast in a Reuters survey.

The yen weakened to trade at 114.14 to the dollar at 11:40 a.m. HK/SIN. The currency had initially traded at 113.88 yen to the dollar immediately after the news, compared with levels around 113.96 seen before.

The weakening in the yen also followed the Bank of Japan stepping up plans for its bond-buying program on Friday.

“A surprising pivot by the BOJ has policy divergence between the U.S. and Japan back to the fore … It’s hard not to remain constructive on the dollar/yen given the divergence narrative and we could see the dollar/yen push higher early this week,” OANDA senior trader Stephen Innes said in a Monday morning note.

Investors were also expected to keep an eye on the bond markets following last week’s climb in bond yields. Yields for the benchmark 10-year U.S. Treasury came in around 2.3927 percent, compared with levels around 2.330 percent seen early last week.

“Looking ahead, traders will continue to watch fixed income like a hawk for further knock-on effects into foreign exchange and equities,” said IG chief market strategist Chris Weston in a Monday morning note, citing upcoming speeches from Federal Reserve Governor Lael Brainard and Fed Chair Janet Yellen due later this week.

In corporate news, shares of Hong Kong-listed Orient Overseas International jumped 19.42 percent on news of a $6.3 billion offer from shipping company Cosco Shipping Holdings. Shenzhen-listed shares of Cosco have been suspended since May, but its Hong Kong-listed shares were off by 0.63 percent.

Shares of Hong Kong-listed Wanda Hotel Development jumped as much as 155 percent on news it was selling 76 hotels and 13 cultural and tourism projects to Sunac, a Tianjin-based property developer for 63.18 billion yuan ($9.29 billion). Wanda Hotel shares were up 82.76 percent at 11:42 a.m. HK/SIN.

Sunac shares in Hong Kong were suspended from trade on Monday ahead of an announcement of “substantial development.”

Citi initiated coverage on Sony Financial Holdings in a note on Friday with a “Sell” rating and a target price of 1,600 yen. Sony Financial shares were up 0.15 percent at 2,040 yen each at 11:38 a.m. HK/SIN.

“We see more downside risk rather than upside potential for the shares over the next 12 months,” Citi analysts Koichi Niwa and Arisa Yoshikoshi said in the note.

Meanwhile, oil prices trended higher. Brent crude futures were up 0.83 percent at $47.10 a barrel. U.S. West Texas Intermediate futures traded higher by 0.86 percent at $44.61.

In currencies, the dollar was mostly flat against a basket of currencies at 11:40 a.m. HK/SIN, with the dollar index last trading at 96.006.

Stocks on Wall Street closed higher on Friday following better-than-expected nonfarm payrolls figures for the month of June. A total of 222,000 new jobs were recorded last month, compared with the 179,000 forecast by a Reuters poll. Wage growth was largely unchanged, compared with the previous month.

Source: CNBC