Wednesday, September 28, 2022

Asia stocks edge up on firmer Wall Street, pound nurses losses

Asia stocks edge up on firmer Wall Street, pound nurses losses

TOKYO - Asian stocks edged up on Monday, taking cues from Wall Street shares hovering around record highs, while the pound nursed losses after a poll showed a shrinking lead for Prime Minister Theresa May's party in Britain's upcoming elections. MSCI's broadest index of Asia-Pacific shares outside Japan was a touch higher.

Japan's Nikkei edged up 0.2 percent while Australian shares dipped 0.4 percent. China's markets are closed on Monday and Tuesday for a holiday.

Brushing aside a North Korean missile launch, South Korea's KOSPI added 0.4 percent to touch a record high. It was on track for its seventh straight day of gains.

Pyongyang fired what appeared to be a short-range ballistic missile early on Monday.

"There are not many negative factors in the market for the KOSPI, and demand seems still strong enough to push the index up a bit more," said Kim Ji-hyung, a stock analyst at Hanyang Securities.

On Friday, the S&P 500 and Nasdaq scraped to record closing highs on strength in consumer shares.

The dollar index against a basket of major currencies was steady at 97.487 after rising on Friday thanks to upbeat US gross domestic product data.

The index fell to a 6-1/2-month low below 97.00 a week ago on U.S. political concerns centred on President Donald Trump, but have since crept back.

The dollar and US stocks would face downward risks if trouble for the Trump administration becomes a long-term concern, said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.

"That said, the possibility of the president actually being impeached remains very low, and any negative pressure on US stocks has been limited so far."

The greenback added 0.1 percent to 111.410 yen, with the safe-haven Japanese currency showing little reaction to North Korea's missile launch.

"While the North Korean situation remains tense, the market has gotten used to missile launches, with broader volatility also declining," said Shusuke Yamada, senior strategist at Bank of America Merrill Lynch in Tokyo.

"The U.S. markets will also be shut today, and that is curbing incentive and restricting overall movements as well."

US markets will be closed on Monday for Memorial Day. The pound was a shade higher at $1.2820 after dropping more than 1 percent on Friday to as low as $1.2775.

Sterling suffered its steepest fall since January on Friday after an opinion poll showed the governing Conservatives' lead over the Labour opposition down to just 5 percentage points with less than two weeks before a general election.

The euro declined 0.1 percent to $1.1166. The common currency had soared to a 5-1/2-month high of $1.1268 last week on factors including relief at the French presidential election outcome, but it has failed to make further headway.

South Africa's rand was turbulent after reports President Jacob Zuma defeated a no-confidence motion against him. The rand went to a two-month high of 12.65 per dollar before pulling back to 12.83.

Crude oil prices slipped, their modest recovery from disappointment over last week's OPEC meeting sputtering out on the back of a relentless rise in US drilling. Oil suffered a big drop last week after an OPEC-led decision to extend production curbs did not go as far as many investors had hoped.

US crude was down 1 cent at at $49.79 a barrel, having slumped to as low as $48.18 on Friday. Brent was flat at $52.15 a barrel. Spot gold hovered close to a near four-week high of $1,269.50 an ounce hit on Friday, led higher by investors who feared political risks.