Asian stocks head higher, dollar weak as traders await Reuters earnings – News Couple

Asian stocks head higher, dollar weak as traders await Reuters earnings

© Reuters. FILE PHOTO: A man wearing a protective face mask, after the outbreak of the coronavirus, talks on his mobile phone in front of a screen showing the Nikkei outside a brokerage in Tokyo, Japan, February 26, 2020.

Written by Alon John

HONG KONG (Reuters) – Asian shares rose on Monday ahead of a week filled with quarterly earnings announcements, although news of China’s property tax experiments weighed on the markets in Hong Kong and mainland China.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.26% while losing 1% on weak earnings from several local companies.

Australian shares rose 0.47%, supported by miners, while South Korea rose 0.5%, although these gains were offset by quieter moves in Greater China.

China’s blue-chip stocks stabilized, despite the real estate index down 3%, while the Hong Kong benchmark rose 0.18% despite the Hong Kong-listed real estate index down 2.6%.

The drop in property inventories followed the announcement on Saturday by the Chinese parliament’s top decision-making body that a pilot property tax would be introduced in some regions.

Real estate developer China Evergrande Group, which was embattled last week, appears to be avoiding a costly bond coupon default at the last minute, and Reuters reported on Monday that some bondholders have received payments.

“Although there has been some news on the Evergrande front, I think we will see more pressure on the real estate sector, particularly small businesses,” said Carlos Casanova, Asia economist at UBP, referring to the authorities’ efforts to ensure housing prices are corrected. Expansion of pilot property tax plans at a time when many real estate companies have bonds due in the coming months.

Also on the investors’ minds are a series of company earnings due this week. HSBC and Facebook (NASDAQ:) will publish their quarterly results on Monday, in Asian trading and late hours in the US, respectively.

Later in the week, other record-breaking companies including tech giants Microsoft (NASDAQ :), Apple (NASDAQ 🙂 and Alphabet (NASDAQ :)), European and Asian financial giants will be in turn. German Bank (DE 🙂 and Lloyd’s (LON 🙂 to OTC:) and Nomura.

“This week’s earnings are taking center stage,” Chris Weston, head of research at the Melbourne-based brokerage Pepperstone, said in a morning note.

Results will be closely watched after a strong start to the US earnings season for many companies, especially financial, which helped both record highs last week, despite the Nasdaq’s Friday drop after Snap (NYSE:) and Intel Corp. (NASDAQ 🙂 The quarterly results have been disappointing.

The risk-friendly mood that supported stocks weighed on safe haven currencies, as did higher energy prices that supported currencies including the Canadian dollar.

The latter was at 93.521, down 0.15% on the day, heading towards a monthly low of 93.455 hit last week, and away from a 12-month high in mid-October.

Traders are awaiting the US third-quarter GDP numbers due on Thursday with the weak reading likely to weigh on the dollar, according to analysts at CBA.

In contrast, UBP’s Casanova said a strong reading could push record US yields higher and lead to a faster-than-expected tightening by US policy makers.

Markets are still trying to position themselves in a widely expected stable position for the US stimulus program this year, and the possibility of a rate hike in late 2022.

Federal Reserve Chairman Jerome Powell said on Friday that the US central bank should begin the process of reducing its support for the economy by reducing its asset purchases, but it should not touch interest rates yet.

With tapering nearing, US benchmark yields soared and yields reached a five-month high of 1.7064% last week. In early Asia the last time was 1.6421%.

Oil prices rose on Monday, extending gains ahead of the weekend, reaching a seven-year high as global supply remained tight amid strong demand worldwide.

It rose 0.88 percent to $86.28 a barrel, while US crude rose 1.11 percent to $84.69, a new seven-month high.

It rose 0.3% to $1,797 an ounce after posting gains in the past two weeks due to rising inflation concerns.

Another asset often described as an inflation hedge was last seen at $61,901, up 1.6% after turbulent trading last week when it reached a new high of $67,016.

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