Asian stocks rise as China gains; oil up on North Sea outage
HONG KONG – Asian stocks rose on Wednesday, helped by a bounce in Chinese shares, though the underlying sentiment was still cautious with investors wary of taking big positions before Presidents Donald Trump and Xi Jinping start their summit on Thursday.
Construction counters were among the top gainers in the mainland and Hong Kong after Beijing on Saturday announced plans to build Xiongan New Area, modelled on the Shenzhen special economic zone next to Hong Kong that helped kickstart China’s economic reforms in 1980.
“This is a very headline-driven market and the only source of optimism is the new economic zone news over the weekend – but that is unlikely to be sustainable,” said Conita Hung, an independent market strategist in Hong Kong.
Shares in more than 30 listed companies seen likely to benefit from the new zone jumped by the 10 percent daily trade limit.
Mainland markets reopened on Wednesday for trading after a long weekend. Hong Kong markets were closed on Tuesday.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent with Shanghai and Hong Kong leading the region by rising of 0.8 percent and 0.4 percent.
Energy-related shares also offered some support to investors as oil prices rose on Tuesday rose thanks to an unplanned production outage in the North Sea and growing concerns about diminishing US oil stocks.
US crude edged higher to $51.19 per barrel on Tuesday. It hit its highest level since March. 8 at $51.30 per barrel in the previous session.
Still, investors remained broadly cautious with safe-haven assets such as gold and Japanese yen remaining well supported before the landmark Trump/Xi summit on Thursday and Friday.
It will be their first face-to-face meeting since Trump took office on Jan. 20, with trade and security issues set to feature prominently. Notably, North Korea fired a medium-range ballistic missile from its east coast into the sea on the eve of the summit. and Gold held near a one-month high at $1,254.45 per ounce, rising nearly 4.7 percent in the last three weeks.
Major currencies traded in a narrow range ahead of the release of minutes from the Fed March meeting in which it raised interest rates, and before the big US jobs report on Friday. The greenback got some help from Japanese importers on a ‘gotobi’ date – a multiple of five – on which accounts are traditionally settled.
The dollar held firm at 110.73 yen against the Japanese currency. “Today, there is real demand for the dollar on ‘gotobi,’ so its downside should be limited,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.
The dollar index, which tracks the greenback against a basket of six trade-weighted peers, was broadly flat at 100.49. The euro was a shade stronger at $1.06795. Bonds came in for some profit-taking after yields fell in the previous sessions. Yields on two-year US Treasury bonds rose to 1.26 percent after hitting a six-week low of 1.226 percent on Monday. -Reuters