Asian Shares Mixed, Korea Advances as Calm Returns

EghtesadOnline: Asian equities were mixed on Wednesday after an uninspiring U.S. session that saw the dollar grind higher, with attention turning away from geopolitics and back to economic data.

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16 August 2017

According to Bloomberg, markets are settling down after a tumultuous few days spurred by heightened tensions between the U.S. and North Korea. South Korean shares climbed as traders returned from a holiday. The latest data showed American consumers splurged in July, dragging Treasuries lower and buoying the greenback. Gauges of volatility in Japan, Hong Kong and the U.S. continued a retreat as calm returned to stock markets.

The revival in U.S. retail sales bolsters prospects that growth will accelerate in the second half, the latest clue on the strength of the world’s largest economy ahead of minutes from the Federal Reserve’s most recent meeting, due to be published on Wednesday. Policy makers have been flagging they may announce plans to reduce the central bank’s balance sheet in September and then potentially raise interest rates again this year.

In other economic news, Australian wage growth matched estimates in the second quarter, rising 0.5 percent from the previous three-month period and 1.9 percent from a year earlier. Wage growth has hovered at a record low in recent quarters as the economy adjusts to a post-mining boom environment.

Elsewhere on Wednesday, Thailand decides on monetary policy -- here’s a guide to that. Data is also due on U.K. jobs and wages, euro-zone GDP and U.S. housing starts.

Here are the main moves in markets:

Stocks

Japan’s Topix index was little changed. South Korea’s Kospi index rose 0.5 percent, reopening after a holiday. The Hang Seng Index rose 0.6 percent in Hong Kong, while the Shanghai Composite Index fell 0.2 percent.

Australia’s S&P/ASX 200 Index retreated 0.1 percent. Singapore’s Straits Times Index was Asia’s worst performer on Wednesday, falling as much as 1.1 percent, as banks and interest-rate sensitive stocks dropped.

Futures on the S&P 500 Index were little changed as of 12:53 p.m. in Tokyo. The S&P 500 and the Nasdaq Composite closed down 0.1 percent on Tuesday and the Dow Jones Industrial Average gained five points, or less than 0.1 percent.

Currencies

The Bloomberg Dollar Spot Index rose less than 0.1 percent after jumping 0.4 percent on Tuesday as the yen, pound and kiwi weakened.

The yen was little changed on Wednesday at 110.65 per dollar.

The Aussie dollar nudged higher after the wages data and ahead of key jobs figures out on Thursday. It was up 0.2 percent to 78.32 U.S. cents.

Bonds

The yield on 10-year Treasuries fell one basis point to 2.26 percent after climbing five basis points on Tuesday.

Australian government notes with a similar maturity saw yields gain one basis point to 2.66 percent.

Commodities

Gold added 0.1 percent to $1,273.16 an ounce after declining 0.8 percent the previous session.

West Texas Intermediate added 0.4 percent to $47.73 a barrel. It has declined almost 5 percent this month.