Asian markets shift focus from global risk to results

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Thursday 05.20 BST

What you need to know

  • Asia Pacific equities pull back after early gains and losses
  • Oil prices consolidate after another drop on Wednesday
  • Dollar weakens further against regional currencies

Overview

Stock markets in Asia were pulling back from early gains and losses in early afternoon trading as oil prices recovered some of the ground lost during a Wednesday dip and the dollar edged lower against regional currencies.

Hot topic

Asia Pacific equities were reverting to their starting positions — echoing moves by the S&P 500, which closed Wednesday up only 0.1 per cent after paring gains in the face of heightened uncertainty about US President Donald Trump’s pro-business agenda after both of his corporate advisory groups collapsed.

Hong Kong’s Hang Seng index was flat after initial gains, with a drop of 0.9 per cent in the real estate segment offsetting rises elsewhere. Tencent climbed as much as 5.5 per cent after the Chinese tech conglomerate reported quarterly operating profits well above expectations. Shares in Cathay Pacific climbed as much as 5.9 per cent on the perception its earnings had finally bottomed out.

In Sydney, financials were 0.6 per cent lower, led by a 7.1 per cent fall for QBE Insurance Group on news the company planned to split its emerging markets division in two to improve performance after a disappointing first half. Telecoms provider Telstra was 8.2 per cent lower after it announced a fall in full-year profit and cut its dividend outlook. The S&P/ASX 200 index was flat.

Tokyo-listed equities were struggling to find a direction as well, despite better than expected export figures for July, as the Topix reverted to be flat in early afternoon trading. Falls of 0.4 per cent for both financials and consumer staples stocks offset gains elsewhere.

Forex and fixed income

Forex moves were settling down on Thursday following volatility earlier in the week. The yen pushed back below the ¥110 mark on Thursday, firming 0.3 per cent to ¥109.85 per dollar.

The Australian dollar was wavering after early gains, up 0.2 per cent on the greenback to $0.7934 after Australian employment data released on Thursday showed lower unemployment but revealed an unexpected fall in full-time employment numbers.

Australian government bonds were on the rise, driving yield on the 10-year note down 3 basis points to 2.634 per cent. The dollar index measuring the greenback against a basket of peers was off 0.2 per cent at 93.391.

Yield on the 10-year US Treasury was up 1bp at 2.232 per cent after falling 5bp on Wednesday amid heightened uncertainty over the outlook for US businesses following the collapse of Mr Trump’s business advisory groups.

Commodities

Oil prices were recovering from 1 per cent-plus drops seen Wednesday for both major benchmarks.

International benchmark Brent crude was up 0.5 per cent at $50.53 a barrel after finishing Wednesday 1 per cent lower. Thursday’s level marked a 4 per cent fall since the end of July. West Texas Intermediate, the US marker, was up 0.3 per cent at $46.92 after ending the previous session down 1.6 per cent. It was down 6.5 per cent in the month to date.

Gold built on a climb of nearly 1 per cent overnight, spurred by the dissolution of Donald Trump’s business advisory councils. The haven rose 0.3 per cent in Asia trading to $1,287.24 per ounce.

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