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Business News/ Market / Stock-market-news/  Asian stocks rise with crude, Kiwi while S&P 500 futures retreat
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Asian stocks rise with crude, Kiwi while S&P 500 futures retreat

New Zealand's dollar strengthened on retail sales data as the recovery in crude oil continued, bolstering the Malaysian ringgit

The MSCI Asia Pacific Index added 0.4% by 10:02 am in Tokyo, rising a third day. Photo: AFP Premium
The MSCI Asia Pacific Index added 0.4% by 10:02 am in Tokyo, rising a third day. Photo: AFP

Wellington: Asian stocks rose, with the regional index extending an almost five-month high as Japanese shares advanced, while US equity-futures retreated. New Zealand’s dollar strengthened on retail sales data as the recovery in crude oil continued, bolstering the Malaysian ringgit.

The MSCI Asia Pacific Index added 0.4% by 10:02 am in Tokyo, rising a third day. Japan’s Topix index gained 0.9% after data showed Asia’s second-largest economy returned to growth last quarter. Standard & Poor’s 500 Index futures dropped 0.2% after the US gauge reached a fresh record Friday. The kiwi added 0.6% after an unexpected increase in retail-sales growth. Brent crude extended gains above $60 a barrel, with the ringgit appreciating 0.6%. Australian and Japanese bonds declined.

While central banks from Japan to the US update on policy this week and Greece holds talks with euro-area finance chiefs, trading is interrupted by holidays, including Presidents’ Day in the US Monday and multi-day New Year breaks from China to Vietnam. Monday’s data signalled Japan’s exit from a recession, though growth was below economists’ estimates amid weak domestic demand. Fighting over a contested transport hub threatened to derail the new truce in Ukraine.

“Even though it missed estimates, the figures are positive which means at least the direction of the recovery is right," Ayako Sera, a markets strategist at Sumitomo Mitsui Trust Bank in Tokyo, which oversees $325 billion in assets, said by phone, referring to Japan’s fourth-quarter gross domestic product report. “I would say the data today is mixed. People haven’t completely lost hope on growth."

BOJ machinations

The yen climbed 0.3% versus the greenback last week, with the Bank of Japan said to view further monetary easing as counterproductive for now. More stimulus could trigger losses in the currency that damage confidence, people familiar with the central bank’s discussions said last week. The yen was little changed at 118.61 per dollar on Monday.

Japanese GDP expanded an annualized 2.2% in the three months to 31 December, trailing the 3.7% increase predicted by economists in a Bloomberg survey. Nominal GDP, which isn’t adjusted for price changes, climbed an annualized 4.5% from the previous quarter. An update on industrial production is also due, with the BOJ set to meet from Tuesday.

Financial stocks drove Monday’s gains in the Topix, which was headed for its highest close since December 2007. Yields on 10-year Japanese government bonds climbed a third day, adding one basis point to 0.43% as similar maturity US Treasuries held losses.

Australian bonds

Rates on Australian debt due in a decade rose six basis points, or 0.06 percentage point, to 2.56%. The S&P/ASX 200 Index dropped 0.2% in Sydney, retreating from an almost seven-year high. The NZX 50 Index lost 0.6% as Contact Energy Ltd sank after reporting a 54% decline in first-half profit. The Kospi index in Seoul slipped 0.1%.

The kiwi climbed to 74.97 US cents, rising for a third trading day as the retail-sales report and a gauge of services beat estimates. Australia’s dollar was up 0.2% to 77.79 US cents.

The ringgit advanced to 3.5580 per dollar as both Brent and West Texas Intermediate crude extended gains. Brent rose 0.2% to $61.64 a barrel after soaring 7.8% on Friday, while WTI was up 0.1% to $52.81 a barrel.

Oil rebound

Oil is rallying from its lowest level in almost six years as US drillers cut the number of rigs in services to the fewest since August 2011. Apache Corp. said last week that it was cutting its oil-drilling rigs by 60%, and Paris-based Total SA joined BP Plc to Royal Dutch Shell Plc in announcing spending cuts. Brent is still down more than 45% from a high reached in June.

Energy producers were the biggest gainers among 10 industry groups on the S&P 500 Friday, advancing 2% as raw- materials companies also climbed. The Dow Jones Industrial Average added 0.3% to its highest close this year, while the MSCI All-Country World Index climbed to its strongest level since 26 November.

The cease-fire in Ukraine came into force at the weekend, with the government in Kiev and pro-Russian militants accusing each other of violations less than a day into the truce. World leaders urged both sides to adhere to the agreement signed last week in Belarus, with a standoff over the town of Debaltseve—a key transport hub on the road that connects the rebel-held cities of Donetsk and Luhansk—emerging as the biggest threat to the deal.

China credit

Aggregate financing was 2.05 trillion yuan ($328 billion) in January, the People’s Bank of China said, matching economists’ estimates, while local-currency bank lending doubled from a month earlier. M2 money supply rose 10.8% from a year earlier, the slowest pace since at least 1996, according to data compiled by Bloomberg.

Hong Kong index futures climbed at least 0.1% Friday and contracts on the FTSE China A50 Index added 0.4% in Singapore after data released following the close of local markets showed a third month of gains in China’s broadest measure of new credit. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York climbed 1.3% on Friday.

The yuan weakened 0.1% to 6.2467 per dollar in offshore trading Monday, after gaining 0.1% last week. Bloomberg

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Published: 16 Feb 2015, 08:40 AM IST
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