Asia Stocks Rise; Yen Gains Amid North Korea Worry

EghtesadOnline: Asian stocks resumed a rally as Hong Kong shares jumped. U.S. stock-index futures slipped as Donald Trump fired FBI Director James Comey, while the yen rose on concern over North Korea’s nuclear program.

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10 May 2017

Chinese companies listed across the border climbed for a third day, while South Korean shares dropped after Moon Jae-in’s presidential victory. The greenback slipped after reaching the highest in a month Tuesday in the wake of hawkish comments from Federal Reserve officials. The Nikkei 225 Stock Average closed in on the 20,000 level ahead of earnings by Japan’s biggest companies, Bloomberg reported.

Optimism for global economic growth is helping drive down expectations for volatility in equity and fixed-income markets. With global stocks trading near record highs, earnings need to keep delivering to appease investors getting restless about higher equity valuations.

Resurgent producer prices in China, which climbed less than forecast in April, have helped fuel the world’s shift away from deflationary pressures. The producer price index rose 6.4 percent from a year earlier, versus a 6.7 percent Bloomberg survey estimate and 7.6 percent gain in March. The consumer price index climbed 1.2 percent, versus 0.9 percent gain in March, the statistics bureau said Wednesday.

Markets in Malaysia, Sri Lanka, Singapore and Thailand are closed for holidays. India’s bond and foreign-exchange markets are also shut, while equity trading operates.

President Trump’s dismissal of Comey comes amid the agency’s investigation of Russian interference in last year’s election. He said the bureau needed new leadership to restore “public trust and confidence.”

Here are key events investors will be scrutinizing:

Earnings are expected from companies including Toyota Motor Corp., Deutsche Telekom AG and Snap Inc.

The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.

Here are the main moves in markets:

Currencies

The yen rose 0.2 percent to 113.73 per dollar as of 1:04 p.m. in Tokyo. The currency fell during the past three sessions to the lowest level since mid-March. The South Korean won fell 0.2 percent, paring an early loss of 0.5 percent.

The Bloomberg Dollar Spot Index lost 0.2 percent after climbing 0.3 percent Tuesday.

Stocks

Japan’s Topix index increased 0.1 percent and the Nikkei 225 rose 0.2 percent. AMP Capital Investors Ltd. says cheap valuations and relative underperformance will allow for further gains for Japanese shares.

South Korea’s Kospi slid 0.9 percent after swinging between losses and gains during morning trading.

Australia’s S&P/ASX 200 gained 0.8 percent, reversing earlier declines as raw-material and financial shares gained.

The Hang Seng rose 0.8 percent. The Hang Seng China Enterprises Index added 1.6 percent and the Shanghai Composite Index climbed 0.3 percent.

Futures on the S&P 500 slipped 0.1 percent. The underlying gauge fell 0.1 percent Tuesday, while the CBOE Volatility Index edged higher after closing Monday at the lowest since December 1993. The Stoxx Europe 600 closed up 0.5 percent at the highest since August 2015.

Bonds

The yield on 10-year Treasury notes fell one basis point to 2.39 percent. Australian 10-year yields dropped two basis points to 2.66 percent.

Commodities

Gold rose 0.2 percent to $1,223.20 an ounce. The metal dropped during the previous five sessions.

Oil climbed 0.6 percent to $46.16 a barrel, after dropping 1.2 percent on Tuesday.