Inside Financial Markets

Asian Stocks Rebound as Gold Slips While Corn Retreats

asia-market-afpAsian Stocks Rebound as Gold Slips While Corn Retreats

Asian stocks advanced, with the regional index rising from its lowest close this month, and gold retreated from a four-month high. Oil held declines as the threat of supply disruptions in the Middle East abated, while corn slid a 10th day on U.S. surplus forecasts.

The MSCI Asia Pacific Index added 0.4 percent by 12:34 p.m. in Tokyo, with the Hang Seng Index climbing 0.3 percent in Hong Kong. Standard & Poor’s 500 Index futures rose 0.1 percent after the U.S. gauge’s biggest weekly loss since April. West Texas Intermediate crude oil traded near a two-month low, while gold retreated 0.3 percent. Indonesia’s rupiah weakened. Corn fell 0.5 percent after the U.S. government raised its 2015 supply outlook. Soybeans extended the longest losing streak since at least 1973.

The Bank of Japan begins a two-day monetary-policy review today, while China will report second-quarter economic-growth figures this week. European Central Bank President Mario Draghi may outline further cheap funding for the region’s lenders when he addresses lawmakers in Strasbourg. Investors are waiting to hear Federal Reserve Chair Janet Yellen’s testimony to Congress later this week as Citigroup Inc.(C:US) and Goldman Sachs Group Inc. report earnings.

“The profits logged over the past week will filter into the stocks with the earnings profile,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients today. “The second-quarter earnings season in the U.S. is likely to be the next major driver of global markets. With all the major U.S. banks reporting this week, the market will get the best view of the ’self-sustaining’ U.S. economy that the Fed now sees.”

Stock Valuations

A gauge of global stocks slipped last week by the most since April amid speculation valuations are too pricey and as a crisis at Portugal’s second-biggest bank renewed concern that Europe hasdn’t resolved its debt problems. MSCI’s Asia-Pacific index retreated 1.1 percent in the five days to July 11, the first drop in nine weeks and the steepest since March. The gauge was at a six-year high July 7, when it reached its most expensive level since December.

The Kospi index in Seoul rose 0.4 percent after dropping 1 percent last week, while Australia’s S&P/ASX 200 Index advanced 0.4 percent in a third day of gains.

Japan’s Topix gauge gained 0.3 percent to halt a five-day slide as the yen slipped 0.1 percent to 101.36 versus the U.S. dollar. The Nikkei 225 Stock Average added 0.3 percent after a 1.8 percent weekly loss.

‘More Positive’

A gauge of Chinese shares in Hong Kong added 0.4 percent while the Shanghai Composite Index climbed 0.4 percent after its first weekly retreat since June 20.

“We had that strong export data last week for China that confirmed the pickup we’ve seen in other figures,” Ric Spooner, chief market analyst in Sydney at CMC Markets, said by phone today. “The market is more positive on China than a month ago.”

A report July 10 showed overseas shipments from China rose 7.2 percent in June, up from 7 percent growth in May though below the 10.4 percent increase predicted in a Bloomberg survey of economists.

China’s economy, the world’s second-largest, probably expanded 7.4 percent in the three months to June 30 from a year earlier, according to the median of 44 economists’ estimates compiled by Bloomberg before data scheduled for July 16. Reports on retail sales and industrial production in June are also due on the same day.

Gold for immediate delivery retreated to $1,334.76 an ounce after reaching $1,345.17 on July 10. Silver slid 0.4 percent to $21.3721, platinum fell 0.4 percent and palladium lost 0.3 percent to $871.31.

Rupiah Slips

Indonesia’s rupiah dropped the most in most than a week after Bank Indonesia said the current-account deficit probably widened to near a record last quarter. The currency fell 0.3 percent to 11,624 per dollar, the biggest drop since July 2, prices from local banks show. In the offshore market, one-month non-deliverable forwards declined 0.2 percent to 11,688, 0.5 percent weaker than the onshore spot rate, according to data compiled by Bloomberg.

The S&P 500 rose to 1,967.57 July 11, cutting its weekly decline to 0.9 percent, still the most since April. Gains in Inc. and EBay Inc. and deal activity overshadowed concern over financial stress in Europe, after Portuguese bonds rebounded.

Alcoa Inc. started the second-quarter financial reporting season last week, with banks including Citigroup, JPMorgan Chase & Co. and Goldman to announce results this week.


Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)